Preamble

The House met at a Quarter before Three of the Clock,Mr. SPEAKER in the Chair.

Oral Answers to Questions — NEWFOUNDLAND.

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs whether His Majesty's Government have given consideration to the early introduction in Newfoundland of some measure of responsible government?

The Secretary of State for Dominion Affairs (Mr. Eden): The position remains as explained to the hon. Member in the replies given to him by my predecessor on 14th February and 28th March last, to which I have at present nothing to add.

Mr. Creech Jones: In view of the continued economic depression and the recent expressions of loyalty by the inhabitants of Newfoundland, is it not possible to create some machinery of an advisory character?

Mr. Eden: The hon. Member may be assured that I have all those considerations in mind. He will also recollect that this situation arose because of the economic situation, which is not yet better, and that what was done was done at the request of the Newfoundland legislature itself.

Mr. Lunn: Will the right hon. Gentleman say what is the attitude of the people of Newfoundland to the restoration of representative government?

Mr. Eden: The hon. Member knows better than I that the original action was taken at the request of the Newfoundland legislature.

Mr. McGovern: Would it not be a splendid gesture to restore Parliamentary government in Newfoundland, and show Hider, by leaflet, that while he is taking Parliamentary government away we are beginning to extend it again?

Mr. Eden: I am sure that the hon. Member will notice with appreciation the excellent response of Newfoundland and its generous offer of recruits.

Oral Answers to Questions — SOUTHERN AND NORTHERN RHODESIA.

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs whether he can make a statement regarding the future constitutional relations of Southern and Northern Rhodesia and the Royal Commission Report?

Mr. Eden: My predecessor and my right hon. Friend the Secretary of State for the Colonies had a series of discussions with the Prime Minister of Southern Rhodesia during his recent visit to this country, in the course of which the questions raised in the report of the Royal Commission were discussed. In view of the outbreak of war, it was necessary to suspend the discussions, but it was agreed with Mr. Huggins that they should be resumed as soon as circumstances permit. In the meantime, I am not in a position to announce any decisions in regard to the recommendations in the report.

Mr. Creech Jones: Can the right hon. Gentleman say whether the evidence taken by the Royal Commission will be printed, and, in particular, whether it will be possible to have access to the evidence submitted by the native witnesses in those territories?

Mr. Eden: That is another question.

Mr. Paling: Would the right hon. Gentleman- explain what is meant by "as soon as circumstances permit"? Does that mean the end of the war?

Mr. Eden: No, Sir, not necessarily. It means that we hope that the postponement is for a comparatively short duration. We thought we must have an opportunity to consider the position in the light of existing circumstances.

Oral Answers to Questions — MERCANTILE MARINE (REQUISITIONING).

Mr. David Adams: asked the President of the Board of Trade whether all vessels of the Mercantile Marine are now controlled; what is the nature of this


control and by what Department of State; and what, if any, vessels are requisitioned by the Government?

The President of the Board of Trade (Mr. Oliver Stanley): A system of control by licence is in operation under the Defence Regulations, 1939, and the Control of Trade by Sea Order, 1939, for all voyages of United Kingdom vessels, other than voyages coastwise in the United Kingdom or in the short sea trades with near-continental countries. The Board of Trade administer the control. The power to requisition vessels has so far been used almost exclusively to meet the requirements of the Fighting Services.

Mr. Shinwell: As regards the requisitioning of vessels, can the right hon. Gentleman tell us what are the financial arrangements?

Mr. Stanley: If the hon. Member will put down a question I will do so.

Mr. Benjamin Smith: asked the President of the Board of Trade (1) how many vessels were acquired by the Government for the merchant ship reserve; how many have been re-sold; to whom; and on what terms;
(2) whether he can state the use to which vessels acquired in connection with the merchant ship reserve are being put?

Mr. Stanley: Four ships were acquired under the Merchant Ship Reserve Scheme and all of them remain in the ownership of the Board of Trade. Three are being employed in connection with the Defence Services and the fourth in the carriage of essential commodities to and from this country.

Mr. David Adams: Is it intended to increase the purchase of these vessels?

Mr. Stanley: With the outbreak of war and the new powers we have got this scheme has become absolete. If we require vessels now we get them by means of requisitioning.

Oral Answers to Questions — TRADE AND COMMERCE.

HURRICANE LAMPS (PRICE).

Mr. R. C. Morrison: asked the President of the Board of Trade whether he is aware that the borough of Tottenham has

received a quotation for hurricane lamps of over £40 per gross, as compared with their standard contract rate of £26 15s. 9d. per gross; and whether he will issue instructions to local authorities and other large purchasers of hurricane lamps to refrain from purchasing at these rates and investigate the reason for the rise in price?

Mr. Stanley: My Department is in touch with the borough council of Tottenham over this matter, and the reason for the rise in price of hurricane lamps is being investigated. I have no authority to advise the local authorities or other large purchasers of hurricane lamps to refrain from buying at this or any other price, but I know what I should do in similar circumstances.

Mr. George Griffiths: What would the Minister do?

Mr. Stanley: I should not buy.

Mr. Griffiths: Then you might be left in the dark.

Mr. Stanley: I am accustomed to that.

WAR RISKS INSURANCE.

Sir Granville Gibson: asked the President of the Board of Trade the total amount of the premiums paid to date by traders under the compulsory provisions of the War Risks Insurance Act, 1939; and whether it is the intention of His Majesty's Government to refund the premiums paid in the event of no loss, or the amount of the difference between the premiums received and the compensation eventually paid?

Mr. Stanley: The total amount of the premiums paid up to Monday, 9th October, in respect of policies issued under the commodity insurance scheme was about £8,750,000. This amount includes the proportion of premiums for the period to 2nd December which may become available to policy holders under the concession which I announced on 5th October in reply to a question by the hon. Member for South-West Bethnal Green (Sir P. Harris). As regards the second part of the question, I can only refer to my reply to the hon. Member for Exeter (Mr. A. Reed) on 20th September, and re-affirm that it is the intention of the Government so to adjust the rate of premium from time to time in the light of developments as to furnish a fund


which will not be more than sufficient to meet claims and expenses, and to take due account of any existing surplus in making such adjustments.

Mr. A. Reed: Can the right hon. Gentleman say what part of this £8,750,000 represents expenses?

Mr. Stanley: Not without notice.

Mr. Mander: Will the right hon. Gentleman say what happens to any surplus there may be after the payment of all claims?

Mr. Stanley: Obviously I could not say that now. The object of the Government is to avoid any surplus in the end by adjusting premiums so as to meet claims.

Mr. Logan: Is any special consideration being given to those shopkeepers who are losing and who have paid an exorbitant rate?

Mr. Stanley: Nobody has paid an exorbitant rate.

Mr. Logan: Is the right hon. Gentleman not aware that representations have been made about cases where it has been proved that there has been a loss, and is nothing being done in regard to those cases?

Mr. Stanley: If the hon. Member has in mind a special case which he communicated to me, I am looking into the matter; but I shall not deal with it on the footing of whether a trade makes a loss or not, but whether the special circumstances of the trade take them to some extent out of the purview of the system.

Sir G. Gibson: Is it the intention of the Government to raise or to lower the premium charges?

Mr. Stanley: I do not think I can add to what I said last night. This matter was very fully discussed in the House last night and I gave the essential information.

Mr. Benjamin Smith: Can the Minister arrange that shopkeepers shall not be allowed to put forward continually the excuse that the rises in price which come to them from the wholesalers are brought about by this war risks insurance?

Mr. Stanley: I dealt with that point in the debate last night.

EXPORT TRADE.

Mr. Mander: asked the President of the Board of Trade whether he is aware of the difficulty of firms engaged in the export trade in obtaining the necessary iron and steel, and paper and timber for packing, and other articles; and whether in view of the importance of the export trade in the national interest, priority certificates can be granted for these materials in suitable cases?

Mr. Stanley: Some cases of difficulty or anticipated difficulty in obtaining materials required for purposes of export trade have been brought to my notice. No general system of priority certificates is at present in operation, but my Department is always ready to give any possible assistance to exporters and to take up cases of difficulty with the appropriate authority with a view to facilitating the prompt delivery of supplies.

Mr. Shinwell: asked the President of the Board of Trade whether he is taking any steps to curtail the consumption of non-essential commodities so as to liberate them for export.

Mr. Stanley: Measures designed to limit home consumption of non-essential goods and to stimulate export trade are receiving the careful consideration of the Government as part of the general problem of ensuring the best use of the country's resources.

Mr. Shinwell: When does the right hon. Gentleman expect to be in a position to state the intentions of the Government in this matter?

Mr. Stanley: I could not say.

Mr. Shinwell: But does the right hon. Gentleman realise that this is a matter of urgent importance and ought not to be delayed?

Mr. Stanley: It is not being delayed.

Viscountess Astor: Will the right hon. Gentleman bear in mind that champagne is not an essential?

Mr. Stanley: I will bear the Noble Lady's opinion in mind.

Oral Answers to Questions — BRITISH ARMY.

RUM RATION (ALTERNATIVES).

Mr. Mathers: asked the Secretary of State for War whether there are any alternatives offered at the time that the num


ration is offered to men on service in this country; and what steps are taken to let men know that alternatives are available?

The Secretary of State for War (Mr. Hore-Belisha): The regulation clearly provides that cocoa or tea is an alternative to rum on the special occasions when an extra stimulant is certified by the medical officer to be necessary in the interests of the health of the troops, and cocoa has, in fact, proved to be a favourite alternative during the inclement weather conditions recently experienced.

Mr. Mathers: The point of the question is whether the attention of the troops is drawn to this alternative.

Mr. Hore-Belisha: I think they are well aware of the alternative, and, if not, I will see what more can be done.

Mr. J. J. Davidson: Would they like an issue of grapefruit?

ENLISTMENT.

Mr. Mander: asked the Secretary of State for War what action is being taken with regard to men now offering them selves for enlistment in advance of the date when they are liable to be called up compulsorily; and whether full advantage is being taken of these voluntary offers of service?

Mr. Hore-Belisha: I propose to make a statement to-morrow.

TERRITORIAL OFFICERS (PAY).

Mr. Stokes: asked the Secretary of State for War why Territorial officers called to the Colours at the outbreak of war are still not in receipt of their pay; and whether he will take immediate steps to ensure that there is no further delay in arranging for their payment?

Mr. Hore-Belisha: I would refer the hon. Member to the answer I gave to the hon. Member for Durham, Houghton-le-Spring (Mr. William J. Stewart) on Wednesday last. The officers in question should have received their pay on 30th September, when the first monthly issue, for all those who had joined before that date, became due. If any such officer has not yet received an issue of pay, he should communicate at once with his command paymaster, or with the army

agents, if he has elected to draw pay from them.

Viscountess Astor: Would my right hon. Friend bear in mind that many soldiers wives have been literally without one penny of any kind for four weeks?

Mr. Hore-Belisha: I am very astonished to hear that, but if the Noble Lady will tell me what cases she has in mind I will do my best to redress the wrong immediately.

Mr. Buchanan: Is the right hon. Gentleman aware that the wives of regular soldiers who were called up six weeks ago are still awaiting an allowance I have sent cases to the right hon. Gentleman and I cannot even get him to look at them.

Mr. Hore-Belisha: It must be because there is some defect in the particulars. There is no intention of delay in this matter, and I am extremely distressed to hear of any such case. I will do my best to put it right.

Mr. Buchanan: Is the right hon. Gentleman aware that a defect in the particulars does not feed the wife, and that six weeks is an extremely long time for a working-class woman to be without money?

Mr. Hore-Belisha: Of course I am aware of it, and of course it will not feed the wife, but if there is no proper address or some failure to supply information, there naturally is delay; but I can assure any hon. Gentleman that if he has a case of that kind I will put it right at once.

Mr. Lewis Jones: Is my right hon. Friend aware that in one case single officers were told that no pay was available until 4th September and that married officers were able to get only 10 per cent. of their month's salary?

Mr. Hore-Belisha: If that is so, and my hon. Friend will be good enough to give me particulars, I will take appropriate steps; but it is a very general statement. Whenever I have looked into a case of the kind I have taken immediate steps to rectify it, but there has usually been some explanation. I would not justify delay, but perhaps my hon. Friend will tell me the facts.

Mr. Stokes: May I ask the Minister whether his statement means that the notification issued to officers that they cannot expect any pay until the middle of November has now been altered by what he has said?

Mr. Hore-Belisha: Officers cannot expect any pay until the middle of November? What officers?

Mr. Stokes: Officers of the Territorial Army.

Mr. Hore-Belisha: I do not recognise any such instruction. It does not seem to me to be a natural instruction to issue.

Mr. Stokes: That is the source of my information, that no pay will be available until the middle of November.

Mr. Hore-Belisha: I assure the hon. Gentleman that there is, obviously, some error. Officers are entitled to a month's pay in arrear, but, if they desire, they can make application to the agent or the paymaster and may be given advances of pay. Those are the regulations, and I cannot reconcile them with what the hon. Gentleman has stated.

Mr. G. Griffiths: Does not the right hon. Gentleman think it is a shame that officers' wives should have to go on public assistance, and is it not time that they had the money without going there?

MILITIA CAMPS.

The following Question stood upon the Order Paper in the name of Mr STOKES:

19. To ask the Secretary of State for War how many persons, in total, the miltia camps at Bulford, Perham Downs, Tidworth, Larkhill and Winterbourne Gunner are built to accommodate; and how many militiamen will be accommodated in each?

Sir Joseph Lamb: On a point of Order. Before this question is asked may I inquire whether it is in the public interest that a question of this kind should be answered?

Mr. Hore-Belisha: The hon. Member will, I hope, appreciate that, in present circumstances, it would be undesirable to publish the figures for which he asks.

Mr. Stokes: May I ask, without disclosing any figures, whether the right hon. Gentleman is aware that the cost of the camps in this area amounts to an average

of more than £300 per head of the militiamen?

Mr. Stokes: asked the Secretary of State for War whether he will state the cost of the sewage work at Devizes on the London road measuring in extent 2,425 yards?

Mr. Hore-Belisha: The work on the camp at Devizes has not yet been completed. In due course, it will be possible to give the total cost of the sewerage scheme as a whole, but not the separate cost of any particular section.

Mr. Stokes: Is the right hon. Gentleman aware that this part of the sewerage work has already been contracted for by the local authority for the sum of £9,075, and that it is reckoned that the War Office are paying something of the order of £15,000 for the same work?

Mr. Hore-Belisha: I was not aware of that.

Mr. Stokes: Will the Minister please look into the matter?

INOCULATION.

Mr. Leach: asked the Secretary of State for War how many soldiers suffering from the effects of inoculation have received treatment at the hospital at Maid-stone during the past month?

Mr. Hore-Belisha: None, Sir.

Mr. Leach: Is the right hon. Gentleman satisfied that every soldier now knows that he has no need to undergo this dangerous operation?

Mr. Hore-Belisha: I have confined myself to answering the question on the Paper. The hon. Gentleman now raises a different question, and perhaps he will be kind enough to put it down.

HORSES.

Mr. T. Williams: asked the Secretary of State for War what complaints he has received regarding the requisitioning of horses; whether he is aware that in one case three armleted civilians visited a stud farm and, without producing any authority, proceeded to examine a number of horses and to brand nine of them; that the owner was informed that he would be paid a total of £435 for stock the cost price of which would be more than three times that sum; how such prices are arrived at; and whether he will provide


for the right of appeal against unjust assessments by the owners of stock requisitioned for national purposes?

Mr. Hore-Belisha: There have been few complaints. In the case to which the hon. Member refers, the purchasers were duly accredited and would have produced written authority, if they had been requested to do so. The prices were considered to be the market value at the present time, in each case. Owners who are dissatisfied with the prices tendered have a right to appeal to a county court judge, and the owner in this case was so informed.

Mr. Williams: Has an appeal been lodged by the person referred to in the question?

Mr. Hore-Belisha: I could not say.

Mr. Williams: Is it generally understood by breeders of horses that they have a right of appeal?

Mr. Hore-Belisha: In this case the person from whom the horses were purchased was so informed, and I imagine that that would invariably be the case.

Mr. Boulton: Had these people compulsory powers to requisition horses?

Mr. Hore-Belisha: Yes, Sir.

Brigadier-General Sir Ernest Makins: asked the Secretary of State for War whether he is aware that, according to all written regulations, cavalry officers were promised that in the event of mobilisation their chargers would be taken over by the remount department up to £120, whereas now they are receiving £60 maximum; whether it is intended to give effect to the original undertaking; and why only half the price is being paid in this case for cavalry horses?

Mr. Hore-Belisha: What the regulations lay down is that privately owned chargers may be taken over at a price to be fixed by agreement, such price not to exceed the maximum amount which might be paid in the event of the loss of the horse by reason of military service. This maximum for the most expensive type of charger is £120. It was recently decided not to pay more than £60 for any horse now being acquired but no compulsion was put on any officer to sell his horse.

Mr. R. C. Morrison: Would it be true to say that cavalry officers who expected to get £120 for their chargers would be the chargers themselves?

Sir E. Makins: Are we to take it that they are not compelled to sell their horses?

Mr. Hore-Belisha: My hon. and gallant Friend may take it that the officers are not compelled to sell their horses?

Commander Sir Archibald Southby: Is my right hon. Friend aware that remount officers are buying for £60-odd horses which are often worth to farmers over 200 guineas?

Mr. Hore-Belisha: We have just dealt with this question. There was a question on the Paper about it, and I explained that there was a right of appeal.

AGRICULTURAL WORK (SOLDIER LABOUR).

Major-General Sir Alfred Knox: asked the Secretary of State for War how many soldiers are now employed by farmers for work on the land; whether he is satisfied that such employment does not interfere with military training; and whether he will put a stop to this practice, in view of the fact that there are numbers of unemployed men registered in Employment Exchanges who could do the work, and for whom farmers applied but cancelled their applications when they ascertained that soldier labour would cost them less?

Mr. Hore-Belisha: I cannot give the numbers, as these are left to the discretion of the local military authorities. One of the conditions of the employment is that it does not interfere with military training. Soldier labour has been made available at the request of the Ministry of Agriculture, owing to the shortage of civilian labour in certain districts. The farmer who employs it is required to pay to public funds the statutory wage which he would have to pay if the men were civilians. It is part of the arrangement that soldier labour will not be demanded if the Employment Exchanges are able to supply civilian labour.

Sir A. Knox: Does not my right hon. Friend agree that if we are trying to turn out soldiers in three months it is essential that they should train the whole time, especially if they have to compete with


people who have been trained intensively for something like two years; and that it is essential to keep them on their job and not to let them go off into side-lines?

Mr. Hore-Belisha: Yes, Sir. I agree in principle with my hon. and gallant Friend, but agriculture was in a difficulty and an appeal was made to us to help. It has been done in other countries.

Sir A. Knox: Could not labour be obtained from the Employment Exchanges?

Mr. Hore-Belisha: No, Sir. It was part of the arrangement that this labour would not be so used if the Employment Exchanges were able to supply sufficient men.

Mr. Benjamin Smith: Would the right hon. Gentleman see that the money earned by the soldiers, which he says is paid into a public fund, is paid to the men who do the work? If they are to be soldiers let them be soldiers.

Mr. Hore-Belisha: They are better off by the arrangement which I have described.

Mr. Smith: They do twice the work.

Mr. Hicks: Does not the right hon. Gentleman think it is desirable, and not only in the agricultural industry, that where civilian labour is required to carry on the economic life of the country, the Reserved List of occupations should be reconsidered, instead of men being called up into the Army first and then being put to work?

Colonel Baldwin-Webb: Is this arrangement of a temporary nature to cover the harvest period, or is it to go on indefinitely?

Mr. Hore-Belisha: It is temporary to assist in a particular difficulty. In reply to the supplementary question of the hon. Member for East Woolwich (Mr. Hicks), the men are protected by the Reserved List of occupations from enlistment. If they are known to be on the Reserved List we have returned men from the Territorial Army who have been previously engaged and who are now required as key men.

YOUNG SOLDIERS (SERVICE ABROAD).

Mr. Kirkwood: asked the Secretary of State for War whether, in view of the undertaking given that no militiaman

under 20 years of age should be sent abroad for military service, he will consider the case of boys who joined the Territorials before war at 18 years of age and who are now being sent abroad as they become 19 years old; why is this differentiation made; and whether he will put an end to this anomaly by ensuring that boys who joined voluntarily shall not be sent overseas at an earlier age than those who were called up under the Military Training Act?

Mr. Davidson: asked the Secretary of State for War whether he will take steps to prevent lads of 19 years of age and under, already serving with His Majesty's Forces, from going overseas until they reach the age of 20?

Mr. Burke: asked the Secretary of State for War whether he is aware that Gunner Kenneth Moore, No. 1462307, has been sent overseas; and why this has been done in view of the Government's policy that no man under the age of 20 years should be sent overseas?

Mr. Hore-Belisha: On the introduction of the National Service (Armed Forces) Bill, I informed the House that we were taking out of the active Forces preparing for overseas all existing men who were under the age of 19, and that I would give an assurance that, if possible, before sending any man called up under the Bill out of the country when under the age of 20, I would make a statement to the House. This undertaking, which was accepted by the House, has been and will be observed. The reason for the differentiation is that the Regular and Territorial soldier has always been under the obligation to serve in the field under the terms of his voluntary enlistment.

Brigadier-General Sir Henry Croft: Will my right hon. Friend give an undertaking that men who have joined the Territorial Army at the age of 18 will not be precluded from going on active service at the age of 19, as there appears to be considerable misunderstanding? Many units have an average age of very little over 19 or 19I years, and if this condition were insisted upon it would deprive those units of the opportunity of standing beside our Allies.

Mr. Hore-Belisha: I can give that undertaking. I am aware of the feeling of young men that they should be allowed to participate in active service.

Mr. Burke: Is the right hon. Gentleman aware that this young man to whom I refer was only 19 years of age, and the undertaking given to the House was that no one should be sent abroad if he was under 20? A volunteer of 19 is just as old and no older than a Territorial of that age.

Mr. Hore-Belisha: I must apologise to the hon. Member for Burnley (Mr. Burke). I omitted to give the last part of my answer. In the case mentioned by the hon. Member for Burnley, the soldier, according to the age given on attestation, is over 19 years of age.

Mr. T. Williams: Is the right hon. Gentleman aware that I have sent him particulars of a case from my division of two brothers, one 18 and the other 20, who were sent abroad? Is not that really a breach of the spirit of the right hon. Gentleman's undertaking?

Mr. Hore-Belisha: In any such case, where a mistake has been made, I have undertaken to bring the man back at once.

Viscountess Astor: But if one applies for these men, as I have done in several cases, they are not sent back.

Mr. Speaker: rose—

Mr. Kirkwood: May I not put one supplementary, Mr. Speaker, on my own question? Does not the right hon. Gentleman's reply mean that the volunteer is going to be placed in a worse position than the conscript?

Mr. Hore-Belisha: From the volunteer's point of view, I think it would generally be true to say that he considers himself in a better position.

Mr. Speaker: rose—

Mr. Davidson: May I not ask a supplementary, Mr. Speaker, arising out of my own question? Does the right hon. Gentleman not realise that when he gave that undertaking to the House it was generally supposed to mean that no lad of under 20 would be sent to France? In view of that, and as he has trained men of 20 and over, would he not consider replacing those young lads in France by men of over 20?

Mr. Hore-Belisha: I think the hon. Member is under a complete misapprehension. Would it further reassure the

House if I told hon. Members that at this moment we are taking out of the Forces for overseas all men of under 19—and they are very numerous—and we are not proposing to send them to France although they have enlisted again?

GAS AND OXYGEN ANALGESIA.

Dr. Edith Summerskill: asked the Secretary of State for War whether he will advise the medical staffs of military hospitals that, whenever possible, they should use gas and oxygen analgesia in the dressing of war wounds of a severe character?

Mr. Hore-Belisha: I am advised that the medical staff of military hospitals are fully aware of the value of this treatment, and will use it in all appropriate cases.

Oral Answers to Questions — SCOTLAND.

LICENSING HOURS, GLASGOW.

Mr. Davidson: asked the Secretary of State for Scotland what is the nature of the representations he has received from the Glasgow Town Council, or the Lord Provost of Glasgow, regarding the licensing hours?

The Secretary of State for Scotland (Mr. Colville): The representations which I received from the Glasgow Magistrates' Committee and from the Lord Provost were in favour of the restriction of the permitted hours.

Mr. Davidson: Has the Minister seen the threat made by the Glasgow Lord Provost that if the publicans do not agree to his suggestions he will apply for an Order-in-Council; and, should such an application be made, will the Minister see that all the interests of the Glasgow citizens are carefully considered before any steps are taken?

Mr. Colville: I think the question is hypothetical, but I will certainly bear it in mind.

Mr. McGovern: Will the right hon. Gentleman see that we do not completely lose what liberty we have in this war for liberty and democracy?

Viscountess Astor: Liberty to get drunk.

EVACUATION.

Mr. Davidson: asked the Secretary of State for Scotland whether he will


arrange a conference of representatives of all Scottish local authorities and Scottish Members of Parliament to discuss the whole question of evacuation of mothers and children?

Mr. Colville: I do not think that a conference of the kind suggested by the hon. Member would at the present time be helpful, but I shall continue to give careful consideration to all representations on the subject of evacuation which are made to my Department. I have met several local authorities, both in sending and receiving areas, and my hon. and gallant Friend, the Parliamentary Under-Secretary, has already had discussions on the subject with a number of Scottish local authorities: he is anxious to take every opportunity of further discussion with local authorities and also with Members of this House.

Mr. Davidson: In view of the fact that the number of mothers and children who have returned to cities in Scotland from evacuation areas is very great, will the Minister not give this point his earnest consideration? Will he call a conference of all local authorities, so that the whole matter may be discussed?

Mr. Colville: I have considered the suggestion, but, as a conference would involve 170 local authorities and 70 Members of Parliament, I do not think it would help us a lot. I shall be glad, however, to consider specific questions.

Mr. Mathers: Is the right hon. Gentleman aware of the considerable dissatisfaction with the result of previous representations made to him, and, in order to get some satisfaction, will he consider the suggestion made by my hon. Friend?

Mr. Colville: No, I am not aware of that dissatisfaction. I would rather that the hon. Member were more specific.

Mr. Mathers: In view of the unsatisfactory nature of the reply and the fact that these things cannot be dealt with by question and answer, I beg to give notice that I shall raise the matter on the Adjournment.

PETROL (RATIONING).

Mr. Ridley: asked the Secretary for Mines how many applications for supplementary petrol rations still remain to be dealt with in the North Midland area; and

on what date it is expected they will be cleared?

The Secretary for Mines (Mr. Geoffrey Lloyd): There are no outstanding applications for supplementary petrol allowances in the North Midland area.

Mr. T. Williams: asked the Secretary for Mines whether he is aware that serving officers and men who possess motor-cars and who cannot obtain supplementary petrol rations are prevented from visiting their families when they secure their few hours, leave each week; and will he look into the matter at an early date, with a view to increasing this allowance?

Mr. Lloyd: Where the basic ration is not sufficient for serving officers and men to visit their families while on leave, application can be made to the divisional petroleum officer in cases where other means of transport are not available.

Mr. Williams: Have any applications met with success?

Mr. Lloyd: That has always been part of the scheme. There may have been misunderstandings in the Press.

Mr. Lunn: asked the Secretary for Mines whether he has considered letters dated 20th and 27th September, 1939, from an organisation claiming to represent 16,000 commercial road users appealing for an increase in the amount of petrol allowed to them; whether he can state whether he will accede to their request; and to what amount?

Mr. Lloyd: The letters in question have been received from the Associated Road Operators whose membership comprises, among other commercial road users, operators of what are known as private hire services; and it is only in regard to the petrol allowances for these services that representations have been made. A meeting has since been held between officials of my Department and representatives of the association concerned at which certain major difficulties were discussed. The association has promised to furnish additional information necessary for the proper consideration of the claims.

Mr. Hayday: Will the hon. Gentleman undertake to consider the national scope of these public licensed vehicles in order that there shall be a more equal distribu-


tion of petrol in the various provincial centres, as I have written to him on the matter?

Mr. Lloyd: I am considering the question of the private hire services. It is a difficult question, because of the possible element of luxury consumption involved.

Mr. Benjamin Smith: Is the hon. Gentleman unaware that in regard to commercial vehicles the arrangement between road transport and the railways has more or less collapsed, and that the attitude of his Department in limiting supplies of petrol is having that effect; and will he reconsider the question?

Mr. Lloyd: The question of rationing for commercial vehicles is a matter for my right hon. Friend the Minister of Transport.

Sir Stanley Reed: asked the Secretary for Mines whether, with a view to conserving the national supplies of petrol and oil, and to making any surplus available for essential purposes, such as agriculture, motor transport and the motor cars of commercial travellers, it is intended periodically to review the extra allowances to private individuals?

Mr. Lloyd: The motor fuel rationing scheme is designed to secure that supplies are available to meet essential requirements. Allowances for private cars will accordingly be reviewed from time to time in the light of this consideration.

Oral Answers to Questions — COAL INDUSTRY.

RATIONING.

Mr. Batey: asked the Secretary for Mines why he has decided to ration coal when so many pits are still closed and so many miners still unemployed?

Major Milner: asked the Secretary for Mines what is the object of reducing the production of coal gas, having regard to the ample supplies of coal and labour available in the mining areas of this country?

Mr. Lloyd: One of the main reasons for rationing coal, gas and electricity was the risk of dislocation of coal transport and distribution facilities. This risk remains and with it the need for rationing.

Mr. Batey: Is the Minister aware that at the present time there must be nearly 100,000 miners unemployed and that this Order is simply making things worse? Why prevent the sale of coal when there is a bigger demand for coal in war time?

Mr. Lloyd: In reply to the question of coal production and unemployment among miners, the Mining Association and the Mineworkers Federation of Great Britain are, at my request, at present considering the methods by which the anticipated increase for coal in war time can be met. That is the general question and they are dealing with it in that general way. It is indeed true that the coal output is rising, and in recent times miners formerly unemployed are being absorbed, but there is the particular question, which is separate from the broad general question of the increased demand for coal, of the difficulties in the exporting districts, where, owing to the convoy system only coming gradually into operation and the dislocation of shipping, there is difficulty in the export of coal, more especially on the North-East Coast.

Mr. Batey: The Minister said that more miners are being employed. Is he aware that only last Thursday the Minister of Labour said that 76,000 miners were unemployed, and that in Durham 14 of our largest collieries are standing idle?

Mr. Lawson: In view of the widespread dissatisfaction in the country on this matter not only among miners, but among the general public, who have not been behind in accepting any restrictions or limitations, will the Minister reconsider this decision, as the answer he has given is vague and gives no reason at all?

Mrs. Tate: Will my hon. Friend make a great effort to ensure that where the population of a town has been largely increased by reason of the introduction of evacuees, it shall not be rationed on its consumption of previous years, but on the consumption of the present population?

Mr. Lloyd: I would say to the hon. Lady at once that that is certainly one of the matters which comes within the competence of the organisation of the local schemes.

Mr. T. Smith: Can the Minister say why so many pits are working short time that cater for home consumption and not for export?

Mr. Lloyd: What I think is true is that there has not been an increase in unemployment in pits that are working coal for home consumption. Actually what has taken place is that the demand for coal is so good that the coal output is rising and unemployed miners are being absorbed. [An HON. MEMBER: "Very slowly."] That is acording to my information. The only men who have been falling out of work, or who come under the system of short-time, are in those districts which export coal. With regard to the output of coal for the home demand, as I have said, the Mining Association and the Mineworkers Federation are at work on that problem at the present time.

Mr. Batey: Owing to the very unsatisfactory reply, I beg to give notice that I shall raise this matter on the Adjournment either to-night or to-morrow.

Mr. Batey: asked the Secretary for Mines the cost of the Department for the Rationing of Coal and the number of persons engaged in it?

Mr. Lloyd: It is not yet possible to estimate the cost of the organisation dealing with coal, gas and electricity rationing, since the administration of the Fuel and Lighting Order, 1939, is a matter for local authorities, to whom the Department has undertaken to refund reasonable expenses incurred. The number of persons at headquarters engaged on the administration of the Fuel and Lighting Order, 1939, is at present nine.

Mr. Batey: Has the Minister realised now that whatever the expenditure, it is a waste of public money?

Mr. Davidson: Surely, the Minister must have made some provisional estimate as to the probable cost, and cannot he tell the House?

FUEL OVERSEERS.

Mr. James Griffiths: asked the Secretary for Mines the number of fuel overseers appointed in the country; what is the scale of payment to these officers; and whether there is any provision in the regulations which debars a local authority appointing one of its members, who is otherwise qualified, to these posts?

Mr. Lloyd: A local fuel overseer has been appointed by each local authority, of whom there are about 1,800. No scale

of payment has been laid down but my Department has undertaken to refund to local authorities reasonable expenditure incurred in the administration of the Fuel and Lighting Order and the Retail Prices Order. There is no provision in the Order which would debar a member of a local authority from appointment as local fuel overseer provided he is not interested in the supply of coal, gas or electricity.

Mr. Griffiths: Is the hon. Gentleman satisfied with the appointment of a large number of these overseers, and will he consider the possibility of amalgamating some of these authorities?

Mr. Lloyd: My present information is that in order to cater for the wide variety of local needs it is wise to have a local man appointed.

Mr. R. C. Morrison: Will the hon. Gentleman bear in mind that he is doing local authorities or the cause of local government no good service by taking up the attitude that it is good policy for local authorities to employ members of their own authority?

Mr. Watkins: asked the Secretary for Mines whether he took the opinion of the law officers of the Crown before issuing his circular letter of 20th September, 1939, to clerks to local authorities, in which it is stated that the Mines Department is advised that the Local Government Staffs (War Service) Act, 1939 does not apply to local fuel overseers; and whether he will introduce an amendment to that Act to remove any disqualification of a member of a local authority employed in the office of a local fuel overseer, as such disqualification has been removed in respect of the Civil Defence service?

Mr. Lloyd: The Department's legal advisers were consulted in regard to the circular letter to which the hon. Member refers. The answer to the second part of the question is in the negative.

MINE APPROACHES (RESTRICTED LIGHTING).

Mr. J. Griffiths: asked the Secretary for Mines whether his attention has been called to the fact that the provisions of the blackout make approaches to many coalmines very dangerous, involving, in many cases, walking over sidings and colliery tramlines; and whether he will


ask his inspectors to examine this matter and take measures to safeguard the men from such dangers?

Mr. Lloyd: Where work on colliery sidings and tramways is carried on at night, certain defined standards of lighting are permissible which should ensure a reasonable measure of safety if due care is taken, and I am glad to say that I have no evidence of any serious accidents being caused at collieries as a result of restricted lighting.

Mr. Griffiths: Will the Minister ask the inspectors to pay special consideration to this matter during the winter months?

Mr. Lloyd: Yes, Sir. I have already asked the inspectors to keep a watch on this matter.

ECONOMIC CO-ORDINATION.

Mr. Shinwell: asked the Prime Minister which member of the War Cabinet is responsible for the co-ordination of the nation's economic activities?

The Chancellor of the Exchequer (Sir John Simon): I would refer the hon. Member to the full statement which my right hon. Friend the Prime Minister made yesterday in reply to questions on this subject.

Mr. Shinwell: As the right hon. Gentleman is, so we understand, responsible for the co-ordination of our economic activities, may I ask him one or two supplementary questions? Will he state what is his conception of his functions in this regard, and whether Lord Stamp, who is the Chief Economic Adviser, is to devote himself exclusively to the work of this Department, whether he is to have a staff entirely independent of any assistance the Treasury may give him, and whether he can say why certain economists who rendered very good service to the Government in the last war, for example, Mr. Keynes, and the Junior Burgess the Member for Oxford University (Sir A. Salter) have not been employed?

Sir J. Simon: I think that the House will feel that these supplementary questions would be better put upon the Paper.

Mr. Shinwell: As the right hon. Gentleman has now been appointed to this very important post, may I ask him

a very plain question? Can he state to the House what is his conception of his functions in this connection?

Mr. Speaker: The hon. Member cannot expect the right hon. Gentleman to answer that in reply to a supplementary question.

Mr. Shinwell: I think it is in order.

Mr. Speaker: The hon. Member should put it on the Order Paper.

Mr. Shinwell: In view of the fact that Lord Stamp has been appointed, am I not entitled to ask the right hon. Gentleman, who knows all about this matter, whether Lord Stamp is to devote himself exclusively to the work of this Department?

Mr. Speaker: That matter was dealt with yesterday by the Prime Minister.

Mr. Shinwell: On a point of Order. The Prime Minister merely stated that Lord Stamp was to be appointed as Chief Economic Adviser of the Government, but he was not clear on the point on which I have asked this supplementary question?

Sir J. Simon: I would appeal to the hon. Member and to the general feeling of the House, that if these important questions are to be put, they should be put upon the Order Paper and not as supplementary questions.

Mr. Attlee: Surely, the right hon. Gentleman does not require notice of the questions whether his Chief Economic Adviser is to be a full-time assistant, or whether he will continue the very numerous functions which Lord Stamp already carries out?

Sir J. Simon: As Mr. Speaker has already observed, that matter was touched upon yesterday. If a question of that important character is to be put, I submit that it ought to be put on the Order Paper.

Mr. Dalton: May I ask the Chancellor of the Exchequer whether he is aware that the lack of confidence which the appointment to this post created yesterday has not been removed by his failure to answer questions to-day?

Mr. Speaker: I am afraid that I am responsible for what has taken place. I


ought not to have allowed these supplementary. The question on the Paper only asks which Member of the War Cabinet is responsible.

INSURANCE COMPANIES (WAR RISK SCHEMES).

Sir G. Gibson: asked the Chancellor of the Exchequer whether he is aware that companies now advertising in the public Press schemes to insure property against war risks give no information as to their resources, expenses and receipts and publish no accounts and are not subject to any control such as is exercised by the Board of Trade in the case of all bona fide insurance companies; and whether he proposes to take any action to control the activities of such companies?

Sir J. Simon: As my right hon. Friend the President of the Board of Trade said on 27th July last, in reply to a question by the hon. Member for East Ham, South (Mr. Barnes), this subject falls to be considered in connection with the report of the committee presided over by Lord Weir. I expect that this report will be published during the course of this week.

Sir G. Gibson: The Chancellor of the Exchequer said last week that he would make a statement on this matter early this week. Does he propose to carry out that intention?

Sir J. Simon: The publication of the Weir Report will be made this week, and in connection with it no doubt a statement will be made.

WAR WEALTH (LEVY).

Mr. Pethick-Lawrence: asked the Chancellor of the Exchequer whether the announced policy of the Government of a levy on war wealth will involve two valuations, one prior to and one after the war; and when he proposes to carry through the earlier valuation?

Sir J. Simon: As I stated in the course of the Debate on the Second Reading of the Finance Bill, investigation into the practicability of a levy on war-time increases of wealth is proceeding, and I am not, therefore, in a position to give the right hon. Member a reply to his question.

Mr. Pethick-Lawrence: The right hon. Gentleman has told us that the Prime Minister stated several months ago that it was the intention to have this war-time levy on wealth. Will the right hon. Gentleman state when that levy will be imposed? If he cannot do so to-day, can he tell me whether he will be able to give an answer if I put down a question next week, or some other time?

Sir J. Simon: The right hon. Gentleman knows that this is a very complicated question. I have already stated that it is being investigated as rapidly as may be, but I cannot state the date when I shall be able to make an announcement.

Mr. Mander: Does the Chancellor of the Exchequer not think the simplest course would be to pass into law Bill No. 16 on the Order Paper—the Conscription of Wealth Bill?

FOREIGN HOLDINGS (TRANSFER).

Mr. Pethick-Lawrence: asked the Chancellor of the Exchequer whether he is satisfied with the present powers he has taken to conserve sterling and to prevent leakage through transfers from one foreign holder to another; and whether he contemplates exercising any further forms of control?

Sir J. Simon: These powers have been very carefully framed with all relevant considerations in mind, and the matter is kept under constant review.

Mr. Pethick-Lawrence: Will the right hon. Gentleman bear in mind also that there is considerable complaint among people who know that these transfers from one foreign ownership to another are resulting in persons with capital sums in this country transferring them to people who use them for the purpose of paying for exports?

Sir J. Simon: I can assure the right hon. Gentleman that both the nature and the size of the problem have been closely observed. There are a number of points that are to be dealt with and, as I have said, all relevant considerations are constantly kept under review.

INCOME TAX.

Mr. Pethick-Lawrence: asked the Chancellor of the Exchequer whether he


is satisfied that the revised assessments for Income Tax will be ready to be in the hands of all taxpayers before 1st January, 1940; and whether he proposes to make any change in the law regarding the duties of clerks to the Commissioners in accordance with the proposals of the Royal Commission on Income Tax?

Sir J. Simon: I am advised that existing arrangements will secure that the work of assessment at the revised rates will be accomplished satisfactorily. Any such alteration of the law as the right hon. Member suggests would in present circumstances have the effect of delaying the issue of the notices of assessment.

Mr. Pethick-Lawrence: Is the right hon. Gentleman aware that in the case of the Autumn Budget of 1931 several weeks went by after 1st January in some cases before the demand was brought to the attention of the taxpayer?

Sir J. Simon: This matter is being proceeded with with all possible rapidity and the authorities believe that it will be dealt with without any reasonable delay.

Mr. Pethick-Lawrence: Will the right hon. Gentleman give attention to this reform of the law with a view to its being used later if it is not to be used in the present emergency?

Sir J. Simon: Yes, Sir, I will certainly consider that.

TREASURY BILLS.

Mr. De Rothschild: asked the Chancellor of the Exchequer what was the average rate at which Treasury bills were allotted at the last tender before the in crease in the Bank Rate; and what has been the average rate since?

Sir J. Simon: The average rate at which bills were allotted on 18th August was 15s. 7d. The average of the corresponding rates for the seven subsequent tenders was £3 3s. 2d.

Mr. De Rothschild: asked the Chancellor of the Exchequer what has been the additional cost to the Exchequer from the increase in rates of Treasury Bills since the Bank Rate was raised?

Sir J. Simon: The additional cost averaged over the six tender dates has been roughly £370,000 a week.

CZECHO-SLOVAKIA (ASSETS, LONDON).

Lieut.-Colonel Sir A. Lambert Ward: asked the Chancellor of the Exchequer when he expects to be able to make a statement regarding the Czech balances at present blocked in London?

Sir J. Simon: This matter is under active consideration, but I am not at present in a position to say when it will be possible for me to make a statement.

Sir A. Lambert Ward: asked the Chancellor of the Exchequer what is the present value in sterling of the blocked Czech balances in London, including the gold deposited in London by the Bank of Czecho-Slovakia?

Sir J. Simon: I would refer my hon. and gallant Friend to the reply given to my hon. Friend the Member for East Aberdeen (Mr. Boothby) on Tuesday last.

INDUSTRIAL ASSURANCE POLICIES.

Sir Arnold Wilson: asked the Financial Secretary to the Treasury whether he is aware that the Courts Emergency Powers Act, 1914, Section 1 (b), prevented the lapsing of industrial assurance policies under £25 in value which had been paid for at least 10 years; and whether he will consider the desirability of such legislation now, having regard to the fact that the number of such policies has more than doubled?

The Financial Secretary to the Treasury (Captain Crookshank): The answer to the first part of the question is in the affirmative except that the minimum period of payment specified in the Act was two years. As regards the second part of the question, the matter is under consideration.

REQUISITIONED ROAD VEHICLES.

Captain Strickland: asked the Financial Secretary to the Treasury why, in the case of road transport vehicles requisitioned by the State on and after the 8th day of a month, only one-half of the licence duty already paid by the operator is refunded and if requisitioned after the 22nd day no refund is allowed for that month; and whether, seeing that the road operator is deprived of the use of a vehicle


for a period for which he has paid a licence, he will refund the full proportion of the duty?

Captain Crookshank: The road operator has no statutory right to any refund unless his licence has been surrendered to the licensing authority on or before the first day of the month, but, as I announced in reply to a question by the hon. and gallant Member last Wednesday, the Government have agreed to make generous concessions in the circumstances in question. To refund the exact proportion of the unexpired licence would involve the licensing authorities in considerable labour and is hardly practicable.

Captain Strickland: Is the Financial Secretary aware that the licence is paid for the use of a vehicle in this country? If through unforeseen circumstances the licensee is deprived of the use of that vehicle, and the Government require it, and the tax is a Government tax, why cannot the Government stand the loss instead of the private individual?

Captain Crookshank: That is true up to a point; but it is also a fact that road operators who surrender their licence before the 7th of any month, or between the middle of the month and the 22nd, have the use of their vehicle for several days without charge.

BIRTH CERTIFICATES (FEES).

Mr. Denville: asked the Financial Secretary to the Treasury whether he is aware that for national health purposes a birth certificate can be obtained for the fee of 6d., whereas if the same people need the same facility in order to claim allowances for their children and themselves they must pay 3s. 7d. each if they call, or 5s. 7d. if sent by post; and will he take steps to remedy this anomaly?

Captain Crookshank: The present statutory position as to certificates and fees is as stated in the question. Cheap facilities are also available under a number of other Acts but I cannot extend them further. If the hon. Member has in mind the case of children of men in the fighting services, in their case it is proposed to extend for the duration of the war the system of free verification where the ordinary certificates are not in the possesion of the applicants.

REQUISITIONED HOTELS (COMPENSATION).

Sir Robert Rankin: asked the Financial Secretary to the Treasury whether any amounts have yet been paid out to proprietors of requisitioned hotels to enable them to meet the demands on them; and if not, what he anticipates will be the earliest date on which the appropriate compensation will be available?

Captain Crookshank: No claims have actually been made as yet. Forms of claim have, however, for the most part already been issued to those persons in whose cases the Departments have evidence that claims will be rendered. Payment of compensation will be made as soon as possible after the receipt and examination of the claims, excepting disputed claims which have to be referred to the decision of the statutory tribunal. I should add that arrangements are in operation for the immediate payment on account of any admissible claim in cases of special urgency.

Sir Herbert Williams: May I ask my right hon. Friend if he can tell us whether any of the requisitioned hotels have had a human being in them since they were requisitioned?

NAVAL AND MILITARY PENSIONS AND GRANTS.

Mr. Dingle: Foot asked the Minister of Pensions whether he will make a statement in tabular form setting out the rates of disability pension and dependants' allowances payable under the Royal Warrant of September, 1939, Cmd. 6105, and the corresponding figures paid in respect of death and injury in the last war?

The Minister of Pensions (Sir Walter Womersley): I am arranging to circulate in the OFFICIAL REPORT a tabular statement showing typical rates of disability pension, retired pay and allowances to dependants provided under the Royal Warrant of 15th September, 1939, and the corresponding rates laid down in respect of the great war as finally revised to meet the abnormally high cost of living in 1919. For the hon. Member's information I have added to the table the rates prevailing at the beginning of the great war.

Following is the statement:

DISABILITY PENSIONS


Rank.
Present War.
Great War Current Rates.
Rates at outbreak of Great War.





Yearly rates of retired pay for total disablement.
Family Allowances appropriate to total disablement.
Yearly rates of retired pay for total disablement.
Family Allowances.
Daily Rate appropriate to total disablement.
Family Allowances.


Colonel
…
…
£300
£25 for wife £20 for first child £15 for second child £10 for third child
£330
There was no provision under the Warrant for family allowance, but the Special Grants Committee made awards on a discretionary basis.
11s. plus wound pension if very severely wounded. 3s. plus wound pension if very severely wounded.
Family Allowances were not payable in addition to daily rate.


Lieutenant or 2nd Lieutenant.
£150

£210

Rank.
Present War.
Great War Current Rates.
Rates at outbreak of Great War.





Weekly rates of pension for total disablement.
Family Allowances appropriate to total disablement (weekly).
Weekly rates of pension for total disablement.
Family Allowances appropriate to total disablement (weekly).
Daily Rate appropriate to total disablement.
Family Allowances.


W.O. Class I
…
45s. od.
5s. od. for wife. 5s. od. for first child. 3s. 4d. for second child. 3s. 4d. for third child.
60s. od.
10s. od. for wife. 7s. 6d. for first child. 6s. od. for the second and other children.
3s. 6d. maximum.
Family Allowances were not payable in addition to daily rate.


Private
…
…
32s. 6d.

40s. od.

2s. 6d. maximum.

DEATH ATTRIBUTABLE TO SERVICE.




Present War.
Great War Current Rates.
Rates at Outbreak of Great War.


Widow of
Widow's Pension.
Allowance for each child.
Widow's Pension.
Allowance for each child.
Widow's Pension.
Allowance for each child.


Colonel
…
£200 yearly
24 yearly
£180 to £240 yearly
£36 yearly
£135 to £200 yearly
£20 to £24 yearly


Lieutenant
…
£90 yearly
£24 yearly
£90 to £140 yearly
£36 yearly
£60 to £80 yearly
£12 10s. to £15 yearly


2nd Lieutenant




Under 40 without eligible child and not incapacitated.
With eligible child, over 40, or incapacitated.

Under 40 without eligible child
Over 40 or with eligible child





W.O. Class I
…
23s. weekly
30s. weekly
5s. weekly
30s. weekly
40s. weekly
10s. for first child, 7s. 6d. for second child, and 6s. for each other child
£30 yearly
£6 5s. yearly


Private
…
15s. 6d. weekly
22s. 6d. weekly
5s. weekly
20s. weekly
26s. 8d. weekly
5s. weekly
1s. 6d. weekly

Motherless Children.





N.C.O's. and Men (weekly rates).
10s. for each.
12s. for first, 11s. for each other.
3s. to 4s. according to rank.


Officers (yearly rates)
£40 for each.
£60 for first, £50 for each other.
From £25 upwards according to rank, and subject to pecuniary need.


Parent.





N.C.O's. and Men (weekly rates).
2s. to 10s. according to circumstances.
3s. 6d. to 20s. according to circumstances.
No provision.


Officers (yearly rates)
Ranging, according to circumstances, from,£12 to a maximum of £55 or half appropriate widow's rate, whichever is the greater.
£15 to £80 according to circumstances.
From £40 upwards according to rank, to a widowed mother only.

Mr. Foot: asked the Minister of Pensions why the rate of disability pension and dependants' allowances payable in respect of injuries incurred in the present war are, in many instances, substantially less than those paid to men injured in the last war and their dependants?

Sir W. Womersley: The rates of disability pension and allowances which prevailed during the great war were raised to the figures laid down in the Royal Warrant of 1919 to meet the abnormally high cost of living at that time. The provisions of the Royal Warrant of September, 1939, are based on the regulations in force for the past 18 years, with certain modifications which make them substantially more favourable, and the rates will give the great majority of pensioners a rather greater purchasing power than that provided in 1919 by the corresponding rates.

Mr. Foot: Is it not the case that whereas a completely disabled soldier with a wife and four children under the 1919 Warrant would have received 75s. 6d., under this Warrant he would receive only 49s. 2d., and does the Minister seriously contend that that difference is completely accounted for by the difference in the cost of living figures?

Sir W. Womersley: I would ask my hon. Friend to await the publication of the calculation.

Sir A. Wilson: Is my right hon. Friend aware that there are no allowances whatever for any number of children over three, and does he consider that to be an advantageous arrangement?

Sir W. Womersley: I would ask my hon. Friend to await the final publication of the figures in respect of the question asked by the hon. Member for Stoke (Mr. E. Smith) on Thursday.

BREAD (PRICES).

Mr. Graham White: asked the Chancellor of the Duchy of Lancaster whether he has now received a report from the Food Council on the price of bread; and whether he can make a statement thereon?

The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison): I have received a report of an inquiry into bakers'

costs conducted by chartered accountants for the Food Council before the outbreak of war, and other relevant information. The question of bread prices in war time is now under consideration by the Ministry of Food, but I am not at present in a position to make a statement.

Mr. De la Bére: Why has the price of bread been increased in the London area since the war, and what possible justification has there been for that increase? Is this not another of those extraordinary things of which we cannot get to the bottom even in peace time?

Mr. Morrison: The Food Council has a scheme for fixing the price of bread in relation to bakers' costs, and it is the intention of the Ministry to follow the same procedure so far as baking in war time is concerned.

Mr. De la Bére: The whole matter is thoroughly unsatisfactory.

Mr. John Wilmot: Is the right hon. Gentleman aware that, together with the increased cost of tea and sugar, this additional impost on the very poor in London is something which cannot be borne?

BUSINESS OF THE HOUSE.

Mr. Attlee: May I ask the Chancellor of the Exchequer what is to be the business for the remainder of the week?

Sir J. Simon: The Prime Minister will make a statement on the present international situation on Thursday instead of to-morrow. This arrangement will allow of the fullest consultation with Dominion Governments.
My right hon. Friend the Secretary of State for War will make a statement immediately after Questions to-morrow. In view of the fact that Foreign Affairs will occupy the House on Thursday, the Debate on the Ministry of Information and the British Broadcasting Corporation will take place to-morrow.

Mr. Davidson: May I ask whether the House is to have a statement from the Secretary of State for Air?

Sir J. Simon: At this very moment.

Ordered,
That the Third Beading of the Finance (No. 2) Bill may be taken immediately after the consideration of the Bill as amended notwithstanding the practice of the House as to the interval between the various stages of such a Bill."—[Sir J. Simon.]

WAR IN THE AIR.

Mr. Speaker: Sir Kingsley Wood.

Mr. Garro Jones: On a point of Order. Would it be possible for you to guide the House by stating on what Motion the statement of the right hon. Gentleman is being made? As far as I am aware, no question has been asked and no Motion is before the House. Will it be possible to discuss the statement made by the right hon. Gentleman?

Mr. Speaker: The statement which is to be made by the right hon. Gentleman is made by leave of the House.

Mr. Davidson: Further to that, in view of the fact that the Secretary of State for Air will probably touch on many aspects of our Air Force, its strength and on buildings and barracks connected with the Air Force, will it be in order for any hon. Member to make a statement in reply after the Secretary of State for Air has made his statement?

Mr. Speaker: We are proceeding on the same lines as in the statement made by the First Lord of the Admiralty.

Mr. Attlee: On the point of Order. Actually, the statement by the First Lord of the Admiralty was made following a statement made on the Motion for the Adjournment of the House, whereas the right hon. Gentleman the Secretary of State for Air is making a statement when there is no Motion before the House. I presume that if we wish to debate any of these statements we must seek another occasion, but we can ask questions?

Mr. Speaker: That is quite true; if you want a Debate on the matter you must seek another occasion.

Mr. Garro Jones: Further to that point of Order. I have no wish to stand between the House and the right hon. Gentleman. I only wish to clear up the procedure for some future occasion. As the position stands at present, it will be within the competence of any hon. Member who thinks fit to object to the statement being made, and, although I do not think any hon. Member would make an objection to a statement of such vital importance as this, circumstances may arise in which if Ministers are to be allowed to make ex parte statements after

Questions, with no opportunity being given to reply to them, this privilege would be abused and it would then become necessary for hon. Members to take objection to these statements being made. The reason that I respectfully submitted this point of Order was that the procedure under which such statements are being made should be brought within the usual practice of the House.

Mr. Speaker: As a matter of fact, this procedure is adopted so that the Government may make a statement.

Mr. Charles Williams: Would it not be perfectly simple to do this in the ordinary way and let the Minister who makes the statement move the Adjournment?

Mr. Speaker: A Minister may make a statement to the House in the ordinary way.

The Secretary of State for Air (Sir Kingsley Wood): The issue of the War Telegrams to all units on the morning, Sunday, 3rd September, found the Royal Air Force in a state of instant readiness, at all stations both at home and abroad. The transition of a fighting service from a state of peace, however troubled, to one of war requires the operation of a vast administrative machinery, and with air defence the time factor is vital. The whole process of mobilisation and assembly at war stations proceeded with the greatest speed and efficiency. We had been helped by previous peace time tests; and a number of our units were at their war stations in connection with peace-time exercises.
As Members of the House can confirm, the spirit and morale of the Royal Air Force are splendid. Officers and men are proud of their Force and confident that they can give a good account of themselves and take a heavy toll of the enemy. Each one of them is eager to play his part in active operations. While willing to recognise the fighting qualities of their opponents they are, I know, inspired by the knowledge that their job is to beat the enemy and to ensure once and for all that aggression and tyranny are ended.
Accounts have already been given of such considerable performances of the Royal Air Force, as the attacks on the German Fleet and the engagements with the enemy in Germany and on the Western Front. They show that the spirit


and determination of the earlier generation of our flying men have been preserved unimpaired. The men who have already been in action have indeed shown to the full their courage and efficiency. Not all have returned; and I know that the House will join with me in paying our tribute to the high example set by the gallant pilots and their crews who have lost their lives in the performance of their duty. There is a revealing motto of one of our Air Squadrons:" I spread my wings and keep my promise." That undoubtedly was the spirit and the purpose of those brave men.
Full recognition too should be given to those who, though they have had to stand by at their war stations in a state of instant readiness for action by day or by night, have not yet been engaged in action with the enemy. The intensity of the operations of the Fighter Command, for example, depends largely upon the activities of the enemy. Instant readiness is demanded and the strain imposed has been as great as, if not greater than, if active operations were in progress. The keenness and the alertness of these officers and men are of the first order.
The activities of the Coastal Command, too, have been unremitting and strenuous in the extreme from the first day of war. In the last war aircraft played their part both as auxiliaries to the Navy and in independent operations against submarines, but their activities were limited by the degree of technical development then attained. To-day the vastly greater range, speed and reliability of our aircraft are being fully utilised, as the First Lord demonstrated a few days ago, in close co-operation with the Navy in the task of defeating the submarine and guiding in safety to and from our shores those merchant ships that ply the ocean.
By its very nature the work is silent and normally unspectacular. It demands continuous flying over the sea in all weathers. The magnitude of the effort of the Coastal Command may be judged by the fact that during the first four weeks of war this Command flew on reconnaissance, anti-submarine and convoy patrols a distance of approximately 1,000,000 miles and provided air escorts for over 100 convoys.
Our air escorts have also often been able to give warning of the approach of enemy

craft and of the presence of submarines from ranges which are far beyond the vision of surface craft. Information as to the habits and movement of enemy submarines and of their varying visibility in different waters have been and are being constantly built up from patient observation, experience and deduction. The result of these endeavours has indeed been fruitful. During the first four weeks of war submarines were sighted by aircraft on 72 occasions and 34 attacks were delivered, some of which were undoubtedly successful. But the value of the work performed must not be gauged by attacks alone. There is the important preventive factor. We have confirmed from prisoners' statements that the mere presence of an aircraft is sufficient to make a submarine submerge and remain submerged, and that the presence of an air escort often prevents a submarine commander from attacking a convoy. Almost daily there have been clashes with the enemy. Thus by their incessant activity and alertness, carried out in full co-operation with the Royal Navy and the Naval Air Arm, the units of the Coastal Command are successfully carrying out a service that is vital to our war effort.
Again, in the Bomber Command, apart from the larger operations upon which they have been engaged, there have been many and valuable reconnaissance flights. They have taken place day after day over German territory and hundreds of hours of flying have been recorded. Vital military information has been gained and recorded and units have familiarised themselves with the country over which they will be called upon to operate. Day and night, reconnaissance aircraft are penetrating into the enemy's country testing his defences and observing his movements and troop concentrations. A complete photographic map of the Siegfried line has been made. Many photographs, taken from only a few hundred feet above the line, go to the composition of this map. A few days ago our aircraft, taking off from an aerodrome in France, covered the whole length of Germany from the Saar to the North Sea, flew on to Heligoland, all without serious interruption, and then made safe landings home in England. All accounts speak as highly of the navigating skill of the pilots and crews as of their determination.
Some of the longer reconnaissance flights—over 1,000 miles or so—have been carried out at night under weather conditions of great difficulty. I will quote one report from among many received, which gives some idea of the conditions:
Weather conditions were extremely bad. A slow-moving cold front covered much of the operational area, giving conditions of dense cloud from 700 feet to 15,000 feet. The freezing level was 10,000 feet, and thunderstorms were widespread.
The aircraft in question, like many others in similar conditions, found its objective, carried out its task and returned safely to its base.
I have another typical report from one of our Groups of the sort of work that is involved during daylight reconnaissances. The names of the towns concerned cannot, for obvious reasons, be mentioned:
Vertical and oblique photographs taken of all 18 objectives except X. Could not take that owing to rain cloud. At Y only obliques were taken because aircraft was flying very low passing under some Heinhel III's which were landing at the time with wheels down. Aircraft came down so low because it was being shot at by anti-aircraft and four Heinkels and wished to get below them.… When near Z, eight guns opened fire at 0946 hours—aircraft at 4,000 feet. Shells burst about one mile apart to starboard and rear of aircraft. Height of shell burst was accurate. Anti-aircraft fire did not worry them.
Seventeen of the 18 objectives asked for have been photographed.
I would like to say a word about the distribution of messages to the German people over large areas of enemy territory which has been combined with the successful reconnaissance work, and has, I believe, been of considerable value in giving information to the people of Germany. It is interesting to note as regards the interest of these messages to the German people that a number of these messages were recently found in the possession of German prisoners notwithstanding the pains and penalties threatened against persons who picked up such communications.
I observed that the German Official Bulletin in acknowledging such a flight over Berlin the other night would have the world believe that the Berlin citizens slept quietly during its progress. Our airmen on their return spoke of the firing and the searchlights they encountered, so that we can only conjecture that the people of Berlin must be very heavy

sleepers. Next day we may hope that they were wakeful enough to peruse what Hitler describes as these "wretched leaflets"!
For some time now the Royal Air Force has been established in France alongside the gallant French squadrons. Everywhere they have been received with kindness and hospitality. The moves of the squadrons to France with all their associated equipment proceeded with the greatest smoothness. Operations have now been in progress for some time and reconnaissance flights are being made continuously over the German lines at both high and low altitudes in co-operation with units of the French Air Force.
As important for the successful conduct of an operation as the pilots and crews, are the ground personnel who maintain the aircraft and engines in a state of fighting efficiency. These men are working tirelessly to keep our aircraft constantly in service. Excellent work has been done by all classes of such personnel, whether regulars, reservists, ex-airmen or members of the Volunteer Reserve.
I know the House will desire me to say a word about the units of the Auxiliary Air Force who are carrying out magnificently their allotted role alongside the regular squadrons and have justified in every way the high expectations which had been formed concerning them. Perhaps on some other occasion I might tell the House of the valuable and devoted work which is being done in the Training, Balloon and Maintenance Commands at home, and in the Overseas Commands —in the Mediterranean, Middle East, Iraq, India and the Far East.
But I would now like to say a word about the important matter of recruitment. We are maintaining recruitment for the Air Force on a voluntary basis and there has been a magnificent response in the many categories for which we have called for personnel. During the fortnight after the outbreak of war no less than 10,000 men were accepted for service as pilots, crews and maintenance personnel, and we are maintaining waiting list's of many others who will be accepted as training facilities expand. I would like to tell the House that they are men of the highest quality and they certainly enable us to look forward to the continuous expansion of the Air Force with the greatest confidence.
We have also taken steps to accelerate the training of personnel so far as is compatible with efficiency and safety. Large numbers of men are already passing from the training schools into units fully qualified for the functions which they have to perform. The training organisation has been expanded on a vast scale —following plans which we laid down before the war—to produce the further large number of pilots, observers and air gunners which we require. Those who have watched these men under training and at work speak of their superb quality both mentally and physically. Large numbers of women have already been enrolled in the Women's Auxiliary Air Force. A large number of former members of the Civil Air Guard too are being absorbed into the Service according to their qualifications and training.
I have spoken of our airmen and I would like to say a word about our aircraft. The engagements which have taken place have more than confirmed the high opinion we had formed of the quality of the types of aircraft now in the Royal Air Force, and in addition we have learned from encounters with the enemy a little more about the types they have in service. Startling claims have been made from time to time in regard to the performance of German military aircraft— particularly, for example, their fighters. The plain facts seem to be that our latest fighters are definitely better than their German counterparts. Happily a specimen of the latest Messerschmidt fighter has fallen intact into the hands of the French so that in regard to this aircraft at least we shall be free to test our convictions at our convenience.
All sorts of claims have been made in German reports as to the numbers of our aircraft shot down. Day after day and night after night our aircraft have been flying over German defended areas and of course we must have our casualties. Some of the claims made by the Germans have been accurate, others have been grossly exaggerated. An interesting sidelight was the mysterious affair at Friedrichshafen. According to early German reports eight French aircraft were destroyed in the course of this attack. No doubt the German defences were in action on this occasion, but it is less clear against what they were in action for most certainly neither the British nor the

French were responsible for this mythical raid.
As I have said, the Royal Air Force has already shown its skill, courage and determination. As in other of our military spheres its action and its work must be governed by our general strategic plans which are designed to bring about the complete defeat of the enemy. What has been undertaken so far has been undertaken advisedly and when measured in terms of prizes offered, results achieved and experience gained, all such efforts have been abundantly justified. The Royal Air Force has every reason to be proud and satisfied of what it has accomplished during the opening weeks of the war. The Air Force has to take its considerable. part in the maximum effort at the right time and in the right place. But as already has been fully shown it is ready to strike and strike hard, and at any time to make its full and effective contribution to winning the war.
I can, of necessity, speak only in general terms of our aircraft production. We have built up, as the House knows, on broad foundations and with progressively increasing speed a vast productive machine which comprises not only the old-established aircraft firms and the Government factories but the great new factories erected by well-known engineering and other organisations and hundreds of sub-contracting firms great and small. At the outbreak of war the rate of aircraft production represented an achievement unprecedented in this country in time of peace. Moreover our factories are every day increasing their labour force and the increased experience of aircraft work has already resulted in an increased output rate per man. New factories are also nearing completion and fresh subcontractors are daily being enlisted into our organisation from a wide area.
Immediately war broke out our carefully prepared plans for greatly increased production were put into effect. They will mean in due course a rate of production more than twice the considerable figure we have now reached. Beyond all this, since the outbreak of hostilities, the War Cabinet has made a fresh examination of the whole position and authority has been given and is being immediately put into effect to add considerably to our production facilities and to insure us still further against the possible effects of enemy action.
We have had our setbacks and no doubt we shall still have to face the difficulties that are common to all great undertakings, both in this country and elsewhere, but I have no doubt that we can count on the same good will and the same determination to see things through as have already served us well. Indeed the efforts of all in the factories —the management and the workmen— deserve the highest praise. They have been unstinting in their efforts and have made and are making a powerful contribution to the strength of our Air Defences.
I had just said there were difficulties "elsewhere." Some people seem to imagine that the organisation of German aircraft production is perfect—that they have no troubles and no difficulties. That, indeed, is very far from the case, and we know of serious setbacks and many difficulties in German production. There is, in fact, no reason to suppose that they have not at least as many troubles as we have had and probably a good many more.
I would like here to add a few words about the unprecedented expenditure of money which we needs must undertake. I appreciate the need of great care and constant scrutiny. I have recently appointed Sir Harold Howitt—the well-known chartered accountant—to be a member of the Air Council to help us on the financial side, and I have also personally drawn the attention of each member of the Air Council to the necessity of exercising the strictest economy in their respective spheres. I am particularly keeping under review our heavy staff requirements in the light of the tasks that have to be done.
I should also like to tell the House that we are acting in full co-operation with France in many of our production plans. Military aviation and production in France have recently made great strides. The efficiency of the personnel of her Air Force and the genius of her engineers and aircraft designers are of the first rank and much mutual advantage has been obtained by full and free interchange of experience and ideas. I have had the considerable advantage of a number of conferences with M. Guy la Chambre, the French Air Minister, and a number of officers and officials are attached to maintain liaison on the production as well

as on the operational side. Representatives of the aircraft industry in the two countries have exchanged visits of inspection and conferred together on common problems. By these means, we have been enabled to act in full accord and we intend to intensify this co-operation to the great benefit of both countries.
Nothing has given us greater encouragement since the war began than the keen desire of all parts of the Empire to play an effective part in air defence. I am thinking not only of the Dominions and India, but of the Colonies. The Dominions have already signified their intention of making a great and powerful contribution to the common cause in relation to air defence. In the last Great War the Dominions gave us large numbers of skilful and courageous pilots and crews. Again to-day in the air the whole strength of the Empire is being marshalled and there is no doubt that the great Dominion effort of 25 years ago will be largely exceeded in the present conflict.
In this connection, I am glad to be able to announce a development of great importance which I can confidently say is destined to make a most effective contribution to the successful prosecution of the war. His Majesty's Government in the United Kingdom put forward last month for the consideration of His Majesty's Governments in Canada, the Commonwealth of Australia and New Zealand an outline of arrangements for the rapid expansion on a co-operative basis, of the training organisation for pilots, observers and air gunners required, first, for the considerable enlargement, and then for the maintenance on the enlarged basis, of the Air Forces of the respective countries, this to be combined with an expansion of the production of aircraft in the Dominions concerned.
The Dominion Governments concerned have signified their ready agreement in principle to these arrangements and as a result they and we have ensured that the many facilities and great natural advantages for the training of pilots and other personnel and the production of aircraft which the Dominions offer, in areas comparatively free from any risk of enemy interference, will be utilised to the fullest extent and to the best advantage. Training schools will be established and maintained in each of these Dominions. The more comprehensive and technical facilities required for advanced training, apart


from those available and to be made available here, will in the main be concentrated in Canada. Personnel from the elementary training schools in Australia and New Zealand, as well as a substantial proportion of the young men passing out of similar establishments in this country, will proceed to Canada to receive there, with similar personnel from Canadian schools, the advanced training which will fit them for service in the line. The young men so trained will join either Air Force squadrons maintained by the respective Dominion Governments in the theatre of operations or our own Royal Air Force units; while those from this country who get their final training in Canada will, of course, come back to join the Royal Air Force squadrons in the field.
The undertaking is one of great magnitude. Its development will result in a very great and rapid increase in the number of training schools, already large, and achieve an increased output of first-line pilots, observers, and air gunners which, combined with our home effort, will ensure that the greatly increased requirements in trained personnel are fully met. The aim, in short, is to achieve by co-operative effort Air Forces of overwhelming strength.
It will be seen that this undertaking involves the concentration of advanced air training largely in Canada. With the facilities which Canada possesses, this co-operative effort will, in the opinion of the Government of the United Kingdom, prove to be of the most essential and decisive character. A Mission from this country—headed by Lord Riverdale, who will be aided by a specially selected technical staff—is already on its way to Canada to meet there corresponding Missions from Australia and New Zealand. These Missions will discuss with the Canadian authorities all the further steps that are to be taken for the rapid execution of the undertaking, including the provision of the necessary aircraft, instructors, ground personnel, and aerodromes.
I should add that for various reasons the Government of the Union of South Africa does not consider this scheme of air training applicable to the circumstances of the Union, and that they consider that their Air Force personnel should receive their full training at home. I am,

however, authorised to say that the Union authorities intend to make their training as complete as possible and to expand their air forces to the fullest extent of their resources.
I need not dwell upon the great significance and far-reaching effect of the cooperative arrangements to which I have referred in an all-important field of war activity, in which the Dominions have already made individual contributions of a gallant and striking character. It is, I think, a notable illustration of the manner in which free and equal members of the British Commonwealth can, by discussion and collaboration, bring to bear in concert the full weight and might of their individual resources to secure the achievement of a common purpose and the success of a common cause.
I am sure that the House will like to join with the Government in paying a tribute to the vision and imagination of the Dominion statesmen who have so promptly recognised the significance of this great conception, and who will, I am confident, contribute notably to its achievement. We are most grateful, too, to the Dominion High Commissioners in London for their helpful co-operation, and I am personally much indebted to my right hon. Friend the Secretary of State for the Dominions for his active assistance.
His Majesty King George V, at the end of the last Great War, spoke in moving terms of the great contribution that the Empire had made in the air to victory. He recalled how the air pilots of the Empire and of Britain had ever been in the forefront of the battle and how far flying squadrons over home waters and foreign seas had splendidly maintained our cause. We shall have our dangers, our ordeals, and our difficulties, but none of us doubts that when the great test comes again, our airmen of to-day—from the Motherland and overseas—will once more record the same magnificent achievements, self-sacrifice and devotion to duty.

Mr. Dalton: While associating myself and my hon. Friends completely with the tribute paid by the right hon. Gentleman on the one hand to the courage, endurance, and skill of the personnel of the Royal Air Force, and on the other to the authorities of the Dominions for the assistance which they are giving, may I ask two questions? First of all, is he,


in the light of the practical experience that has now been gained in air operations satisfied of the effectiveness of methods of co-operation between the Royal Air Force and the Royal Navy, on the one hand, and the military authorities, British and French, upon the other? Is he satisfied that the closest and most effective co-operation has now been achieved and worked out? The second question that I would like to put to him is this, particularly having regard to the magnificent promise of added contributions from the Dominions: Can he now assure the House that the time is not far distant when Britain will have recovered her air supremacy over Germany, which should never have been jeopardised and thrown away — [Interruption]— and which this country had in 1931 when the labour Government were in office?

Sir K. Wood: So far as the latter question is concerned, I think what I have indicated to-day will satisfy the hon. Gentleman that we are taking every step in that connection. So far as co-operation with the Navy and the military authorities is concerned, it is very close at the present moment. We are endeavouring to improve it still further, and I can assure the hon. Gentleman and the House that we shall leave nothing undone to that important end.

Sir Archibald Sinclair: On behalf of my hon. Friends, I thank the right hon. Gentleman for his statement, and, like the hon. Gentleman who spoke from the Front Opposition Bench, we associate ourselves with the tribute which he paid to the spirit and efficiency of the Royal Air Force. May I ask him, in view of the denials, counter-denials, and counter-counter-denials of the Ministry of Information by which we were confused yesterday, whether the officers and men who displayed such conspicuous gallantry and skill in the attacks upon the German fleet in the Kiel Canal have been rewarded by His Majesty's Government?

Sir K. Wood: Yes. I understand that an announcement is being made to-day.

Mr. Bellenger: The right hon. Gentleman has referred to the losses which we have sustained in attacks that we have made on the enemy, and, of course, one must be prepared for that, but has he nothing at all to say of the effects of that remarkable raid which was made on the

Kiel Canal and on the German battleships? Surely the House is entitled to some substantial information and not mere camouflage?

Sir K. Wood: Many substantial report's of that occasion have been issued, and I do not want to dwell on the matter again. I think that very full accounts indeed have been given on a number of occasions.

Mr. R. C. Morrison: Why did the right hon. Gentleman not refer to the part which is being played by the balloon barrage?

Sir K. Wood: I said that on a future occasion I might be referring to it.

Mr. Poole: In view of the claims made by Germany of losses which they say we have sustained, will the right hon. Gentleman say whether any useful purpose is served by withholding that information from the British public, seeing that the enemy already know it?

Sir K. Wood: I have paid great attention to that.

Mr. Poole: Do the enemy not already know the number of machines they have destroyed?

NEW MEMBERS SWORN.

Arthur Hugh Elsdale Molson, Esquire, for County of Derby (High Peak Division).

Sir Rudolph Dymoke White, Baronet, County of Hants (Fareham Division).

MESSAGE FROM THE LORDS.

That they have passed a Bill, intituled, "An Act to facilitate the execution of trusts during the period of the present emergency."[Execution of Trusts Emergency Provisions) Bill [Lords.]

EXECUTION OF TRUSTS (EMERGENCY PROVISIONS) BILL [Lords.]

Read the First time; to be read a Second time To-morrow, and to be printed. [Bill 279.]

TRAMWAYS AND LIGHT RAILWAYS (STREET AND ROAD) AND TROLLEY VEHICLE UNDERTAKINGS.

Order [4th April] for a Return relative thereto read, and discharged.—[Captain Wallace.]

Orders of the Day — FINANCE (No. 2) BILL.

As amended, considered.

CLAUSE 12—(Charge of excess profits tax.)

4.43 p.m.

Sir Reginald Clarry: I beg to move, in page 16, line 19, at the end, to insert:
(6) This Section shall not apply to any trade or business carried on by statutory undertakers and consisting wholly or mainly in the rendering in the United Kingdom of any of the following services, namely, the supply of water, gas, electricity or hydraulic power.
For the purposes of this Sub-section the expression 'statutory undertakers' means any local or public authority authorised by, or by virtue of, any enactment to render any of the services aforesaid in the United Kingdom, and any other person so authorised who is precluded by, or by virtue of, any enactment from charging any higher price for those services than that authorised by, or by virtue of, the enactment or, in the case of a body corporate is either so precluded or precluded by, or by virtue of, any enactment from paying a dividend at any higher rate, or distributing by way of dividend any greater amount than that authorised by, or by virtue of, the enactment."
I move this Amendment on behalf of the Joint Conference of Public Utility Undertakings. The anomaly which it is designed to rectify was not appreciated until after the passage of the Bill through Committee last week. Public utility undertakings operate under Acts of Parliament which entail statutory obligations and restrictions as to prices and distribution of profits. It was for this reason that those undertakings were exempted from the National Defence Contribution in the 1937 Finance Act. The present Excess Profits Tax is an alternative to the National Defence Contribution. In the 1939 Finance Act, Section 28, Armaments Profits Duty is applicable to articles and materials, and although an Amendment was put down in similar terms to the provision in the 1937 Act the Government did not accept it, but put in something else which had the same effect, namely, that the articles sold by public utility undertakings were to be exempted. It seems to us that as the Excess Profits Tax supersedes the Armaments Profits Duty and the National Defence Contribution, it is only a logical consequence that a provision should be inserted in the present Bill

to make the position of public utility undertakings quite clear.

Sir Francis Fremantle: I beg to second the Amendment. I do so on behalf of the water companies.

445 P.m.

The Chancellor of the Exchequer (Sir John Simon): My hon. Friends have called attention to the fact that the proposed Excess Profits Tax would apply to statutory undertakings. As I said when I opened the Emergency Budget, it was intended to apply this tax to statutory undertakings, and I do not see any reason why it should not be so applied. The National Defence Contribution was a tax on profits. The Excess Profits Tax is not a tax on profits, but a tax on the increase of profits. There may have been something to be said for excluding statutory undertakings from the National Defence Contribution, although that matter, I recollect, was challenged. I am bound to say that in the case of certain examples which could be quoted, I can see a considerable argument, for including some such undertakings. When we come to the Excess Profits Tax, which is a tax upon an increase in profits above a previous datum line, if a case of increased profits occurred in relation to statutory undertakings, I think they ought to join in the general contribution. They were not excepted from the Excess Profits Duty for the reason, no doubt, which I have now stated. While, therefore, I appreciate the importance of the point raised by the Amendment, which I have considered carefully, I regret I cannot agree to this change being made in the Bill.

4.47 p.m.

Mr. Pethick-Lawrence: I cannot help thinking that the right hon. Gentleman is justified in the attitude he has taken up. The effect of the Amendment would be that statutory undertakings would be entitled to make profits above the profits they made before the war without having to pay a contribution towards this tax. My hon. Friends and I certainly support the position taken by the Chancellor of the Exchequer.

Sir R. Clarry: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

CLAUSE 13.—(Computation of standard profits.)

4.48 p.m.

Mr. Lewis: I beg to move, in page 18, line 13, to leave out from "was," to "they," in line 14, and to insert:
not sufficient to give a reasonable return upon the capital employed.
This Clause provides for the method of computation of standard profits, and Subsection (7), which we are seeking to amend, provides that in certain circumstances a person carrying on a business may appeal to the Board of Referees if he is of opinion that the standard profits in his case would not be fair. As the Sub-section reads now, the Board of Referees can only take action if such an application is made if they
are satisfied that, in the standard period, the rate of profit or the volume of business was less than might then have been reasonably expected.
We take the view that those words are much too vague. Let me give an example. Suppose a man engaged as a cotton spinner went to the Board of Referees and said, "During the years mentioned in this Clause my business was carried on at a loss. I ask, therefore, for a special computation of standard profits in my case." The Board of Referees might say, "Let us see what Sub-section (7) says. It says that we can interfere if we are satisfied that the rate of profit or the volume of business was less than might then have been reasonably expected. It is notorious that in those years conditions in the cotton trade were very bad, markets difficult to obtain and foreign competition very severe. We do not think that you could reasonably have expected to make a profit during that period." If the Board of Referees said that, this cotton spinner would be entitled to no relief at all.
No doubt the Chancellor will say, That is not what I mean"; but we are not concerned with what the Chancellor means, but with the words which are in the Bill, and when the Bill is passed it will be too late to rectify things if we find that we have not indicated sufficiently clearly to the Board of Referees what are the circumstances in which we want them to act. I submit that the words as they stand now, particularly with the word "then" included, could reasonably bear the interpretation which I have suggested, and that in such cases the

Board of Referees might, within the terms of the Sub-section, refuse to give any relief at all. Surely the House would wish that where over these alternative standard years a firm which has been properly conducted has been unable to make a reasonable profit it should be granted a special standard to get over the difficulty. That is, I take it, the intention of the House, and I ask that words should be inserted which will clearly state that intention. The Amendment proposes to leave out the words:
less than might then have been reasonably expected,
and to insert instead.
not sufficient to give a reasonable return upon the capital employed.
The referees would then be able to take action if they were satisfied that in those periods the rate of profit or the volume of business was not sufficient to give a reasonable return on the capital employed. I would point out that they would not be obliged to do so, but that they could grant relief within the limits given by the Bill. I dislike exceedingly the words which the Chancellor has put into the Bill. It may be that he does not any more care for the words which I suggest. I am not wedded to any particular form of words, but it seems to me there is a weakness in the Bill here. The instructions to the Board of Referees are not sufficiently clear. Obviously they must be granted the wide discretion they get from the rest of the Sub-section, but if I am right in claiming that the House desires that where it was not possible to earn a reasonable return on the capital employed, during the periods laid down the Board of Referees should, if they think fit, be allowed to give a special standard. If I am right in that assumption I do not think it can be argued that the Bill as it stands gives adequate instructions to the Board of Referees, and I would ask the House to amend it.

4.55 p.m.

Sir Nairne Stewart Sandeman: I beg to second the Amendment.
When this question was raised on the Committee stage the Chancellor promised that between now and the next Budget he would go into it very fully. That is all right as far as it goes, but I have heard from the cotton trade that in the meantime they are extremely worried and would like to know something more


definite. Perhaps this Amendment may raise difficulties, such as, what is the meaning of the words "capital employed"? But I feel certain the cotton trade would much rather have a close scrutiny made of the capital employed than have things left to the will of the Board of Referees, no matter how fair-minded they be. They would like a little hope, and I think it is not much to ask that words like this should be inserted in the Bill. The Chancellor will have plenty of time before his next Budget to alter the wording to something better for the cotton trade than even these words, but I would beg him to accept this Amendment, which really will do a great deal of good.

4.57 p.m.

Mr. Amery: I hope that my right hon. Friend will give favourable consideration to amending the words of the Sub-section. I consider that the Amendment put forward by my hon. Friend would effect an improvement, but, at the same time, I am not sure that it covers all the difficulties which may arise and which my right hon. Friend promised to consider between now and his Budget next spring. As an instance of the difficulties that may occur I would suggest the case of industries like mining. It is not reasonable to expect a profit, or at least a substantial profit, in the early years of development in mining. The words of the Clause as they stand, especially the words "reasonably expected" and "a reasonable return upon the capital employed" would give no consideration to the case of a mine which had been making a loss, or no profit, or a very small profit over the standard years, but which is making a substantial profit to-day or may be making it in the near future. The position in the standard years would be no indication at all of what would be reasonable treatment as regards the profits now earned.
It may be said that that point is, to some extent, met by the second part of the Sub-section dealing with the alternative of a standard rate of profit, but there, again, it should be remembered that in the case of many of these undertakings the profits are the profits of a business not only highly speculative in character but engaged in the exploitation of a wasting asset, an asset which may in some circumstances waste very rapidly. There, again, I hope that my right hon. Friend will give

consideration to some modification of the second part of the Sub-section in order to meet that difficulty. In the case of E.P.D. during the late war, special provision was made for undertakings of this sort, and special rates of standard profit adjudicated in respect of them. I wish deferentially to suggest to my right hon. Friend that here, also, is a special problem which I know that he cannot deal with in the wording of the Clause this afternoon, but which I hope he will take fully into consideration in the course of the next few months.

5.0 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): Broadly speaking, two kinds of case have been put forward during the discussions this afternoon and on the Committee stage. They are, first, the business undertaking which was in the process of development and had not earned what would be considered a reasonable standard of profit, and, secondly, the general case of businesses suffering from industrial depression, having made only a small profit or having even suffered losses beyond reasonable expectation. It is clear that, as the Sub-section now stands, both classes of case would have the opportunity of going to the Board of Referees and stating their case. The mover of the Amendment was of the opinion that there is not sufficient direction to the Board of Referees as to the basis upon which they are to make any change. He said that he was not wedded to any form of words, and so did the seconder of the Amendment, and they thought that the words proposed were better than those in the Bill, although they might not necessarily be the best words, and we might have to amend them next year. In view of that impression, perhaps we had better short-circuit the matter and not change the words of the Bill now.

Mr. Leslie Boyce: Is the interpretation of the right hon. and gallant Gentleman that the words as they now stand in the Bill would give the Board of Referees an unfettered discretion to do what they thought right in the circumstances?

Captain Crookshank: I do not say that that is the case as the words now stand. I made the definite statement on the Committee stage in regard to this matter— as the Chancellor has also said—that this legislation will not be affected by these words one way or the other, as the words


will not be finally required until after the next Finance Bill. My right hon. Friend said that he would need to consider the points raised, and possibly others as well. We recognise that the new tax is of some complexity, and that the Committee stage has had to be taken a day or two after the Second Reading, which does not give those who may come within the range of the tax an opportunity of considering all its effects. The normal procedure upon a Finance Bill is to allow a very big gap between the Second Reading and the Committee stage, because it provides an opportunity for discussing points which we may not ourselves have foreseen, but those whom the Finance Bill touches may have seen. That does not mean that we always think the suggestions made are reasonable, but there is an opportunity for discussion.

Sir N. Stewart Sandeman: Do we understand the Minister to be making a promise that the words will be amended in order to carry into effect what we are trying to get at?

Captain Crookshank: I cannot say that they will be amended to carry into effect anything in particular. I did not take the matter any further on the earlier stage, and I cannot take it any further now. My right hon. Friend has noted what has been said, and in both kinds of case which have been raised we shall give the matter our consideration in the light of all the circumstances so that we can put before the House our conclusions in the next Finance Bill. Provided that my hon. Friends who are interested in this matter do not resign before then, they will, no doubt, have an opportunity of bringing the matter forward again. On the whole, the House will probably agree that that is the best way to deal with it. These are difficult matters, but we recognise the weight of the argument which has been presented.

5.6 p.m.

Mr. Pethick-Lawrence: What the right hon. and gallant Gentleman has said is reasonable in all the circumstances, but I am a little doubtful as to the precise meaning and effect of the words which appear in the Bill. I am not sure that they meet the point which the Sub-section was intended to meet, but if, after full examination of them, the Chancellor of the Exchequer can come to the House next spring with a slight emendation of

them in order to achieve the purpose which we all have in mind, we, on these benches, shall examine the new words without any prejudice, in order to do justice to all concerned. Of course, the words which the promoters of the Amendment would substitute are unacceptable, because they would change the whole basis of the tax. They would go back from the idea of a tax on excess profits, to a tax on an excess of profits over some standard based on capital. That was just the mistake which was made on a previous occasion, and which it would be impossible to resurrect in the Bill. I am prepared to look favourably on some Amendment if it be found that the words as they stand in the Bill do not achieve the purpose which we all have at heart, but such words as are now proposed in order to amend them could not possibly be accepted.

Mr. Lewis: Having regard to the undertaking which has been given by the Financial Secretary to the Treasury that this matter will be further examined, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Bill be now read the Third time."

5.8 p.m.

Mr. James Griffiths: I am sure that the Chancellor of the Exchequer and the Financial Secretary have no cause to complain of the way in which the Budget and the Finance Bill have, on the whole, been met in the House and in the country. A moment or two ago the Financial Secretary said that normally there is a very wide gap between the first and later stages when we are discussing matters of this kind. On this occasion the gap between the introduction of the Budget and the Third Reading of the Finance Bill is just 14 days, and during the whole of the discussion the tenor of the House has been a desire to help the Chancellor of the Exchequer although we have made criticisms and have taken some of the criticisms to the Division Lobby. Listening to the Committee stage last week, and again this afternoon, I felt that most of the Amendments and criticisms were in the nature of canvassing and special pleading for something to be done when


the Budget and the Finance Bill come to be discussed next year.
I wish to say a word or two at this stage, when bidding farewell to this emergency Finance Bill, about what we think are some of the things in the Bill that will need consideration. We have to face a colossal expenditure of £2,000,000,000, only half of which we are raising by this Bill. Many criticisms have been made about the severity of the taxation that is being imposed, but we ought, on sober reflection, to remind ourselves that, even on the estimated expenditure of £2,000,000,000, this Finance Bill will raise only half the amount required; and the expenditure of this financial year is likely to exceed, perhaps substantially, that sum of £2,000,000,000. We are meeting only half the bill; we are passing on the other half to the next generation, or that part of it which will survive this war. If the country has received this Finance Bill and the Budget on which it is based with some measure of commendation it is because it believes, and will go on believing until it is deceived, that the Government intend to meet as much of the cost as can be met as the war goes on, instead of following the example set in the last war of passing on so much of the bill to those who come after.
Let me say a word about Part I of the Bill—the part which includes the indirect taxation which is being levied. The Financial Secretary to the Treasury, in reply to a question by an hon. Member on this side of the House early in August, gave some very interesting figures. He was asked the total amounts of indirect taxation levied in this country in the financial year 1930–31 and in the financial year 1939–40. The reply which he gave indicated the enormous increase that has taken place in indirect taxation in recent years. It should be remembered that indirect taxation weighs heaviest on those who are least able to bear it; and, therefore, an increase in indirect taxation is an increased tax on the livelihood of the poorest in the land. The Financial Secretary's reply showed that in 1930–31 the amount raised by indirect taxation was, in round figures, £240,000,000, and in 1939–40 it had increased to £343,000,000. Added to that increase are the millions more which are being imposed under the new Budget, which the poorest people

have to pay on their necessities of life. Every additional indirect tax means a reduction of the standard of life of the people of this country. In this Budget we are increasing indirect taxation, and so reducing the standard of life of our people; and we feel that that has not been justified by the arguments put forward. That is why we pressed the Government in Committee to reconsider some of the indirect taxation they are proposing; and we shall go on protesting whenever such indirect taxation is proposed.
The only indirect tax in this Bill to which we took such strong objection that we registered our protest in the Division Lobby was the increased duty on sugar. I detected in the speeches from the other side—with some notable exceptions—a kind of complaint that we were making much of little, that after all this increase was only a penny per pound and that, therefore, there was no real substance in our complaint. But there is real substance in our complaint. It may be only a penny per pound; but there are, unfortunately, tens of thousands in this country who have to budget in terms of pennies, who have to calculate carefully how they shall spend the few shillings and pence that they get; and every additional penny reduces still further a standard of life which is already too low. The aged, the widows, the sick, the injured, the unemployed, and another class of our people about whom we shall hear more to-night—the soldiers, airmen and sailors who are fighting the battles of the country now—find this an addition to the very heavy responsibilities and burdens that they have to carry. Our objection has not been expressed out of a desire to make political capital, but because we know, out of our own experience, that every penny taken from these poor people means a reduction of their standard of life, which ought not to be reduced any further.
It is not only a question of the penny per pound added to the cost of sugar. It involves an increase in the price of every commodity into which sugar enters as an ingredient. Already those commodities are increasing in price. I do not know to what extent the increases that have taken place in the prices of these commodities are justified by the addition to the cost of sugar. We know that people who manufacture and trade in these things pass on these additions


to the consumers, and often they pass on much more than the amount that is levied by this House. We ought to realise that when we levy a penny per pound on sugar we actually impose a burden of very much more than is represented by the tax. This increase has taken place at the same time as other increases in prices. Since the war started there has already been an average increase of a penny per pound. That means altogether an increase of 50 per cent. in the price of sugar. That is a real imposition upon the poor—an imposition that they cannot bear.
We had hoped that, if we had been able to continue to live in peace, we might be dealing in this Parliament—perhaps daring this week—with the needs of one of the most deserving classes of our population—the old age pensioners. Instead of considering their claims, which now, apparently, for the time being have been laid on one side, and easing their burdens and making life a bit brighter and happier for them, we are adding burdens to them. I urge the Financial Secretary, when, along with his right hon. Friend, he comes to consider the next Budget, to realise that at a time like this, first consideration ought to be given to the poorest people in the land and added burdens ought not to be put upon them.
I want to add a word or two to the very eloquent appeals which have been made with regard to the changes that have been made in this Finance Bill in the incidence of Income Tax by reducing the exemption limit from £125 to £120, reducing the allowance in respect of earned income from one-sixth to one-fifth, reducing the allowance to married taxpayers by £10 and reducing the allowance for children from £60 to £50 for each child. Eloquent and well-informed appeals were made in this House to the Chancellor of the Exchequer and the Financial Secretary to reconsider this matter. My hon. Friends, including the Member for Kennington (Mr. Wilmot), placed before the Chancellor of the Exchequer a case which I thought would have met with a response. They put the case amply that here in this Budget the Government are increasing out of all proportion the burden that falls upon the little men in this country—the men receiving £400 or £500 a year. This type of man is becoming increasingly

important in industry. The technicians and supervisors and people who have this income are usually unorganised and have no one to fight for them. Their incomes are fixed, and do not increase with an increase in the cost of living, and at a time like this the incidence of taxation falls very heavily upon them. I hope the Financial Secretary to the Treasury will read once more the speeches which have been made from this side of the House upon this aspect of the problem, and also the circular which, I believe, has been sent to every Member of Parliament by the National Federation of Professional Workers, an organisation which speaks for some of these people, pointing out that the incidence of these new proposals weighs very heavily upon them.
There has been very general agreement throughout the country that the reduction in the allowances for children is a very short-sighted policy. At a time like this those who are bearing the responsibility of parenthood and are doing their best to equip their children for the tasks of life, ought to be encouraged. During last Session I heard most eloquent speeches from hon. Members opposite urging that the time had come to consider some sort of family allowances, so that the burden of rearing families should not fall entirely upon parents, who ought to be assisted by the State. That plea has been made by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) and by the right hon. Gentleman who is now the Secretary of State for Dominion Affairs. If the country is satisfied, as I believe it is, that we ought to ease the burdens upon parents, it is unjustifiable in this Finance Bill to add to their burdens at a time like the present. I hope that the Financial Secretary will still be in his place when next April comes round and this problem has to be reviewed, and that he will pay full attention to the speeches and the representations which have been made, and will restore these allowances to their pre-Finance Bill position.
I want, in conclusion, to say a few words about the subject of the Excess Profits Tax, which took up most of the time on the Committee stage of the Bill, from the standpoint of the workers and the industries of the country, bearing in mind particularly our experience during


the last war. We on these benches welcome the Excess Profits Tax as far as it goes, and yet we ought to think also of the psychological effect of beginning a struggle like this with the knowledge that there are to be excess profits which are to be taxed, the State to take 60 per cent. and the person making the excess profits being left with 40 per cent. We would take the lot. We would do something more—we would stop excess profits being made. The Chancellor of the Exchequer and the Financial Secretary have been very careful in speaking about this tax. They have made, as far as I recall, no estimate of what it will produce, and I can quite appreciate that fact. There have been varying opinions expressed in this House. The hon. Gentleman the Member for East Aberdeen (Mr. Boothby), who speaks frequently on financial matters, expressed the opinion that this tax would be the most productive of all the taxes in this Finance Bill. He hazarded the opinion that excess profits were going to be made, and attempted to justify excess profits. [An HON. MEMBER: "No!"] I believe I am not doing the hon. Member an injustice, though he is not here. He pleaded for deflation and an increase in price level. He said that unless we raised the price level, and, therefore, by implication raised the standard of profit, and made excess profits in order to tax them, we should not be able to pay for the war. I believe that I am summarising fairly the argument which he put forward.
I want to put one or two practical considerations to the Financial Secretary in dealing with the Excess Profits Tax. I would ask him again to think of the psychological effect. It obviously means, if there are to be substantial excess profits, that the price level will be raised and that prices will be increased. If the cost of living increases, the real value of wages will fall, and industrial workers will begin to agitate—as indeed they are agitating already—and we shall have all over again what we had during the last war, that industrial will o' the wisp—the attempt to keep wages up in accordance with increasing prices and causing an enormous amount of discontent. I hope the Financial Secretary will read the report of the Commission appointed in 1917 to investigate the causes of industrial unrest. Representatives of the Commission went

to South Wales, Durham, Northumberland and Scotland and investigated the causes of the industrial unrest which was so manifest during 1917. They presented reports and Mr. G. N. Barnes, who was then a Member of this House, summarised their findings.
The two reasons they put forward for industrial unrest—in the order of their importance, they said—were the increases in the price of food and complaints about malnutrition, and, secondly, suspicion of profiteering. That was second in importance, and will be so now. I remember the last war. I was in South Wales, and I remember what took place. There were increases in prices, fabulous increases; industrial workers making vain attempts to keep up with those increases in prices; war-time millionaires. I remember the feeling at that time. We are told that Welsh people are very mercurial and temperamental, but I know the Welsh people, and I can tell the House that one of the causes of the unrest was that, whereas miners were working hard and getting a good deal of paper, it meant very little in the shops. At the same time they saw these millionaires strutting about the place making excess profits out of the anguish of the nation. I do not believe that people in 1939 and 1940 will stand that. If we are to face the difficulties that are ahead and sustain the morale of the people, a stop must be put to that. There must be no profiteering.
When people talk about paying for the war out of increased profits I want them, when putting forward their financial theories, to realise the practical effect on the people of this country. I ask the House to consider that if we increase the price level and increase profits the time will come when we shall have to adjust ourselves. We know what took place when the adjustment came after the last war. Fundamentally the Special Areas are the consequence of the increased prices in the last war, and their effect on the export trade. There were tremendous repercussions in South Wales and Northumberland and Durham, in the cotton trade and in all exporting districts. Those districts paid a terribly heavy price for the way in which the last war was financed. After the inflation there came deflation. I hope that consideration will be given to this matter. In one of the weekly papers last week the military critic ended his article with these words:


This is a war of nervous attrition, and it is the moral effect of the coming offensive that will count more than the military. The real front is at home
And it is. Most of our hopes are based upon the possibility, that we hope will become a probability and a certainty, that the German people will overthrow their rulers, and refuse to put up with their misdeeds.
If the important front in Germany is the home front, I hope it will be realised that the home front is important with us, too. When we frame our budgets and our finance Bills, it is essential that we should place the burdens upon those best able to bear them, that we should not place burdens upon the poorest, that we should not do any of the things we did in the last war which we paid for so heavily afterwards. We have passed legislation in this House which compels the youth of this country to lay their lives on the altar of sacrifice for the nation. This House has no right to pass legislation to lay the lives of the youth of this generation on the altar of sacrifice unless at the same time we pass legislation that wealth be mobilised for the service of the nation.

5.37 P.m.

Mr. Graham White: The eloquent appeal made by the hon. Member for Llanelly (Mr. J. Griffiths) for measures to control prices and prevent inflation and all the evils which flow from it, was in fact a plea for a strong and centrally controlled economic policy which will make effective the regulations which decide the order of priority of those services that remain to the civil population, and for a general ordering of our economic life— which we understand is the wish of the Government—in order that the whole resources of the nation may be devoted to the prosecution of the war. We have heard to-day and yesterday something of the plans which the Government have made, of the committees appointed and of the assistance sought from eminent men to carry this control into effect. The House and the country will watch with great interest and some anxiety the work of those committees and of those who are to control our economic destinies. I am quite sure there is no temper to tolerate anything which is inefficient. People will expect that inefficiency and incompetence at home should be dealt with in the same way as inefficiency and incompetence on the field of battle. I associate myself

with all that my hon. Friend said in that respect.
Now that we are parting with the Finance Bill I should like to comfort myself with the reflection," Sufficient for the day is the evil thereof," but I think everybody must feel that this Bill is probably one of a series of Finance Bills each succeeding one of which will probably have to be more drastic in its character. Certainly we are not likely to forget the first of the series, which makes higher demands on the taxpayer than any Finance Bill in recent times, or possibly at any time. It is a most notable feature of the discussions in the House on this Bill that they have been conducted without prejudice and with an absence of political predilection which, I think, is quite extraordinary. Everybody feels that any Chancellor of the Exchequer who failed at this time to propose drastic taxation would be failing in his duties. The taxpayer feels that there is a great deal of disagreeable medicine to be taken, and that he should make the best of things and take the first dose as quickly as possible. The most disappointing thing about this Finance Bill is that, in spite of the very heavy burdens and exactions which are placed upon the community, the net result is so small and the amount raised in effect contributes such a small amount of the total expenditure, as far as we can see, at present. The new taxes, grievous as they are, do not yield more than £107,000,000 this year and £220,000,000 in a full year, and this year they add only £52,000,000 or £53,000,000 to the aggregate of the estimated income on the taxes made in April last. The whole total amounts to 51 per cent. of the estimated expenditure presented before the House by the Chancellor of the Exchequer. That is a comparatively small result in spite of very great efforts.
This Budget places taxes and demands with great severity upon people at both ends of the income scale. At the higher end of the income scale it amounts almost to a social revolution. It will cause many people to alter their modes of life, and the lower end of it will fall most grievously upon that class to which an hon. Member referred a short time ago when he spoke on the sugar tax. In regard to the old age pensions, had the House been told in July last that nothing was to be done and that conditions were, in fact, to be worse, there


would have been a revolution on the benches. The country expects something to be done. The fact is aggravated and not softened by the great amount of expenditure which is taking place at present. In spite of all our difficulties, something should be done. We were told at Question Time to-day by the Chancellor of the Exchequer, in response to a question, that in raising the Bank Rate from 2 per cent, to 4 per cent. over the six periodical issues of Treasury bills, it had averaged an increased cost to the Treasury of £340,000 a week. Those matters make one think it should be possible to do something to lessen this blow and the great hardship which falls upon the poorest of the poor.
For my part, I approve in the main the policy of the Chancellor of the Exchequer. My friends and I criticised the sugar tax because we would have been willing to advise and work with the House in accepting that tax if we had been given an assurance that something would be done for the old age pensioners. We also felt called upon to demur with great misgiving at the reduction of the children's allowances, because it is out of step with the thoughts of the country at the present time with regard to the younger generation. Anyone who thinks must realise that the life of a nation depends upon the number and also the quality of its children, and that is out of line with what the Government are doing in this direction. So far from placing an increased burden upon the rising generation and upon those who are responsible for them we should see something established in the nature of increased children's allowances. We think the Chancellor of the Exchequer was right in raising the greatest amount he could by taxation, because nothing can be done to shuffle the burdens of the present day on any succeeding generation. The money has to be raised now and it has to be spent now, even if it is spent on armaments and the like rather than on other things which are more beneficial to the people. We approve of the policy also because it is the only alternative to the policy of inflation, which we know works badly and unjustly and places hardships upon people who are unable to contract out of them.
With regard to the remarks of the hon. Member above the Gangway who made

one or two observations on the Excess Profits Tax, I think everyone agrees that we should be happier if we thought there would be no such things as excess profits in war time. It is by no means certain that there will be any; on the other hand, it may be inevitable, but it remains to be seen whether there will be any excess profits, and if so what they will be. I think we should look forward to the future. After all, this Bill does not exact the maximum total of our resources. It does not amount to more than 16 or 17 per cent. of the total income of the people in this country, and that is an important fact which should be noted not only in this country but also abroad. In approving the taxation as provided in this Bill, my hon. Friends and I have not been unmindful of the criticism which has come from certain quarters, which are entitled to be heard, to the effect that this Bill and the taxing proposals were untimely and unopportune. I realise that those words are endeared to the hearts of people who criticise Bills, but it will be said that, coming now, this taxation has increased unemployment and has stopped the wheels of civil industry before the war machine was ready to take over those who were in charge of industry and those employed in it. That criticism may prove to be justified.
Finance is not the whole story. We cannot consider finance without relating it to the wider subject of the general economics of the country. People in this country would, I believe, be prepared to face even heavier burdens if they were convinced, but only if they were convinced, that the maximum effort was being made. Critics who say that the taxation policy of the Budget is wrong because it dislocates civil machinery before the other machinery is ready, will be justified in their criticism if the other departments do not function with boundless energy, drive and initiative so that they absorb the unemployed. Our whole resources should be mobilised in the task of winning this war.

5.50 p.m.

Sir George Schuster: I do not propose to deal with the major issues raised by the Finance Bill. So far as they are concerned they are really settled. The Chancellor of the Exchequer is going to get his Bill, and our job now is to make the scheme a success and do our


best to produce the maximum effort in spite of some difficulties which will be created by the burdens of the Budget. I only wish to raise certain points of detail in connection with the Excess Profits Tax, which I had not the opportunity of doing in the earlier stages of our discussions. I hope that the Financial Secretary will take note of them.
In the first place, I would ask him if he could give us a little more definite assurance or explanation, of what are the intentions of the Government as regards the coming into force of this burden. The position has been taken by the Chancellor—in response, indeed, to a suggestion from an hon. Member—that inasmuch as the tax cannot raise very much money this year it is not very material to have all the details settled satisfactorily at this time, and that there will be time to review them before the Finance Bill is introduced at the regular time next spring. But I want to make this point. There will be many companies closing their accounts at the end of December or before the introduction of the next Finance Bill, and they will have to make some reservation for the Excess Profits Tax. They will not know where they are if things stand as at present, and I put it to my right hon. and gallant Friend that it would be of immense value if these details could be discussed without delay so that if the Government come to the conclusion that some more definite words are possible than the words in Clause 13 then some early indication might be given of what the Government propose to do in the matter. I am sure that everyone who reads the words of Sub-section (7) must feel that as they stand they are extremely ambiguous, and that we cannot know where we are.
In talking on this matter I want to make it clear that I am not talking as one who objects to burdens. If the Excess Profits Tax is a good tax and the money is required, by all means let the burden be imposed even to a much heavier degree than we have before us now, but I am quite sure that we shall all agree that burdens of this kind, if they are to be imposed, should be imposed fairly and that injustice should not be done as between one class of business and another. I see the possibility of considerable injustice being done as the words stand, if

they are interpreted in ways which are quite possible.
My right hon. Friend made the point in what he said this afternoon, that two classes of cases had been put before him, the class of case of a business such as the cotton industry which has been going through a depressed period in the years when the datum line has to be fixed, and another class of business which is just building up its undertaking and, therefore, had not developed its resources properly in the years which count for the datum line. I should like to put to him a third kind of case which is possible, and that is the case where, say, business A for one reason or another has been going through a time of re-organisation during the years which count for the datum line. It is quite possible that in those years the business may have been earning very little profit because it has been carrying out a scheme of re-organisation, whereas another undertaking, in the same field of business, has been operating normally at a handsome rate of profit. I happen, as a matter of fact, to be personally affected by such a case. No one wants to argue his own business interests but when we have knowledge from our own experience it is just as well to bring it out as a piece of evidence. I am giving this case by way of illustration and the figures which I shall use are not exact but merely illustrative.
You may have business A in the years 1935, 1936 and 1937 operating on a basis which produced no profits at all, and business B engaged in the same trade may have been earning 10 per cent. Business A may have recovered in the year 1938 before any of the influences of the war began to work and may have earned a profit of 10 per cent. Business B has been making 10 per cent. all the time. Business A is not entitled to take its 10 per cent. for the year 1938 into account in calculating the datum line. Both business A and business B may then go through the war earning a profit of 10 per cent. but business A will be only able to distribute 4 per cent. on its capital, while business B will be able to distribute the full 10 per cent. That, in my opinion, is extremely unfair, and I cannot believe that it is the intention of the Government in putting forward this proposal to produce a result of that kind. I recognise that it is quite possible that the referees


will interpret the wording of Sub-section (7) of Clause 13 as entitling them to give special consideration to the circumstances of business A, but there is no security in the words as they stand. The referee can say, "Admittedly you were going through a period of reorganisation at the time and it was quite a ' reasonable expectation that you would earn no profits in those years."
Therefore, I put it to the Chancellor of the Exchequer that those words require clearing up, and that the sooner they are cleared up the better. All that anyone asks for is fair treatment. I take it that the intention of the Bill is to catch profits which are above the normal expectations of shareholders as based on past results, such extra profits being directly or indirectly connected with conditions created by the war or preparations for the war. If that intention can be embodied clearly in the wording of the Bill it would represent the real purpose behind this Measure and would achieve universal satisfaction.
There is just one other point of detail that I should like to put to the right hon. Gentleman. It is a very technical matter. I do not want to go into it in any detail, but merely to have it on record for consideration. It is the question as to the method in which the profits of subsidiary companies are taken into account in assessing the parent company. According to the wording of Sub-section (7) of Clause 13 the ceiling of profits which can be allowed, except in special circumstances, would be profits sufficient to pay the preference dividends of the company and 6 per cent. on the nominal ordinary share capital. A company which has a subsidiary company, that is a company in which it owns not less than 90 per cent. of the ordinary share capital, is, according to the wording of Clause 17, to be assessed on the whole of the profits of itself and its subsidiary, and it has to take into account the capital employed in the subsidiary. That is capital in a different sense to capital on which the 6 per cent. is allowed. It is quite possible that the subsidiary company may have a large issue of preference shares carrying a higher rate of dividend than 6 per cent., all held by the outside public and 10 per cent. of its ordinary shares held by the outside public which also have received regular higher dividends than 6 per cent. I want to ask my right

hon. Friend to consider whether the words as they stand are quite clearly drawn so that sufficient profits to pay the dividends on preference or ordinary shares held by the outside public would be taken into account in settling the "ceiling" for the profit which the parent company would be allowed to earn.
I only want to make one more point in conclusion. I listened with very great sympathy to what was said by the hon. Gentleman who spoke first from the benches opposite. Nothing would be better than if we could go through the war without any excess profits being earned—if we could go through it in a spirit of partnership, all of us working under the inspiration of motives of patriotism and not of a desire to make profits. I believe that is possible. But, if we are to go through the war on that basis it demands very efficient organisation in the Government Departments and a purpose—a fulfilled purpose—on the part of the Government to stimulate voluntary co-operation and to take advantage of every offer of voluntary cooperation. Given such a lead and a technique for making it effective, I believe that people will pull together for a common purpose from motives of patriotism, and not of profit.

6.2 p.m.

Mr. Tinker: I have been present at many Third Readings of Finance Bills but I have never known so much interest taken before. It seems to me rather strange that I have heard very little criticism with regard to the increased Estate Duties. Usually there is a great outcry from the other side against any proposals to increase them, but this time it has been recognised that that is one of the places where money can be found, and there is very little objection to it. I wish the Chancellor of the Exchequer had gone rather deeper into the Estate Duties and got a little more money and left other things out. The next point is in regard to excess profits. We can have no doubt that there is some idea in the Chancellor's mind that excess profits will be made. It fills most of us with dismay to think that in a time of national crisis, when everyone ought to be giving all he can to help to bring the war to a sucessful issue, we have to try to meet people who use every means in their power to make excess profits out of the nation's need. I trust


that a message will go forth to manufacturers and others who have to deal with these things to keep down their profits as much as possible. Let it be brought to their mind that this kind of thing is not altogether playing the game. I trust that hon. Members opposite will not try to protect these people. The purpose of certain Amendments on the Report stage seemed to mc to be to protect those who were making excess profits. They seemed to be trying to urge on the Chancellor not to be too hard on them, not to enact provisions which might make the burden worse for them than it is. If they are making excess profits, let us get as much out of them as we can. I hope that the words of the last speaker will be noted by manufacturers that patriotism ought to be the first thing in the mind of everyone.
In reference to Income Tax, there are one or two things with which I did not altogether agree in regard to children's allowances, but, on the whole, one cannot complain of the Income Tax increase. Neither can one complain about the Surtax increase. That, again, to my mind, is the right way to get the money. I have always held that whatever you take from the Surtax payer cannot very much reduce his standard of life. He has all that he wants to live upon. It may be that some luxury that he can very well do without will be cut away, but he ought not to complain of being called upon to pay Surtax on his income above £2,000. I think the Chancellor might very well have examined the question of indirect taxation more carefully.
The sugar tax, to my mind, is the worst of all the taxes in this Bill. The burden will fall very heavily on the poor homes, and it is one of the chief things to which we object in the Bill. We did not object to the Bill as a whole, but there are items in it to which we took strong objection. Sugar is used in every home in the land, and the increase will be a burden on poor homes more than on rich. One section which will be harder hit than any is the old age pension people. Everyone to whom we speak about the Budget, Conservative, Liberal or Labour, agrees that the old age pensioner is being the hardest hit of all and that something ought to be done. If that was the feeling of the House of Commons in July last, and it was evident that something would be done before the end of

the year, how is it that, now that the burden has become greater, there is no attempt to meet it? We have had no promise at all from the Government that anything wil be done. Give us some kind of promise, some hope for the future for these aged people. If the right hon. and gallant Gentleman would reassure us on that matter I would almost compromise with him on many things. If he would say, "In a few months time we will see what we can do in regard to that," it would go a long way to winning my approval of the Budget. If he does not give that promise, then I can only say that the Government will be getting away with a point with which they have no right to get away. The case ought to be met by the Government. I trust that when the right hon. and gallant Gentleman replies to the Debate, we shall receive some assurance that he recognises the claims of these people, and that he will give us some promise.

6.11 p.m.

Mr. Hely-Hutchinson: I am grateful for an opportunity of saying a few words at this stage of the Bill, although I fear my approval of its contents must necessarily be qualified. I support the Bill as far as it goes, but I do not think it goes far enough. I do not think it is a brave enough Bill. Those who have to meet the taxes imposed by the Bill are glad and proud to shoulder these additional burdens in so far as they fall upon themselves alone, and for that reason, and to that extent, they approve of the taxes that are imposed. I should like to say that certain of the remarks made by the hon. Member who opened the Debate from the Opposition Benches fell upon my ears most acceptably, although I did not agree with his conclusions. The hon. Gentleman was speaking of the decreased allowances in respect of children. There are not many hon. Members who have so many concrete reasons as I have for hoping for generous allowances in respect of children, but nevertheless, I am most happy to do my best to meet the additional burdens now imposed and proud to the extent that I am able to do so.
On the other hand, far the greater part of the adjustments in life which are forced upon taxpayers by this increased taxation necessarily involves economies in sums of money paid out to other people, either directly in wages or indirectly in the purchase of goods the cost of which


is necessarily made up by wages. The burden of these increased taxes, therefore, necessarily falls upon a great many who are not directly taxed by the Bill and falls unevenly upon them in relation to their total income. Quite a proportion of this secondary group will accordingly contribute less to the revenue on their own account. Therefore, I have some misgivings as to whether my right hon. Friend will, in fact, collect the revenue which he anticipates.

Mr. Montague: Does not the hon. Member see that his argument, if carried to a logical conclusion, is that the same thing would apply wherever the taxes were applied?

Mr. Hely-Hutchinson: I see that perfectly. I am not disputing it. I am merely pointing to that side of the matter. What is needed, I think, is a tax which inflicts economy, but by a tax on expenditure rather than a tax on income, because a tax on expenditure falls much more on the individual. Even if my right hon. Friend does collect the revenue which he hopes, when we consider the relation of that expected revenue to the total expenditure with which we are faced, we realise that it produces only one tenth of the estimated deficit this year, and only one fifth in a whole year—and even that, as the hon. Member for East Birkenhead (Mr. White) pointed out, only on the assumption that the expenditure itself has not been under-estimated for the present year and will not be increased next year, an assumption which, I think, none of us feels he can make with any degree of certainty.
Therefore, as we consider the Bill we are rather led to the comment, "All this disturbance with so little result," and I think we may feel that the comment of Mr. Keynes—the accuracy of whose mathematics no man can gainsay—that these proposals are mere "chicken feed to the Dragons of War," is a justifiable comment. Indeed, to take one tax alone, the Surtax, even if it were practicable to take the whole of the balance of the income of the Surtax payers, which is in fact the means of livelihood not only of 100,000 Surtax payers, but of their 1,500,000 of families and dependants, the whole of that £250,000,000 would still produce only a further one-fifth of the

deficit with which we are at present faced. Moreover, I am inclined to agree with those who feel that the Excess Profits Tax will be effective only to the extent that there is a rise in prices, and that rise in prices will create the very effect which the hon. Member for Llanelly (Mr. J. Griffiths) fears—a fear in which I entirely join with him.
We must face the fact that it is mass expenditure which makes up the cost of war and the increase in the cost of living which all of us fear and wish to avoid. It has been estimated that in the last war, when we were in the full tide of our war effort, there were over 5,000,000 people who were receiving and spending on an average £3 a week more than they had been receiving before the war. That amounts to £750,000,000 a year—a direct and indirect addition to the cost of war and the cost of living, for those 5,000,000 people were directly or indirectly employed in some way in the war effort. One is forced to conclude that while the spectacle of a comparatively small number of large fortunes being acquired in the course of the war is a public scandal, nevertheless it does not create anything like such a financial problem as the problem which is created by the increase of a very large number of small incomes, which are no scandal at all. Therefore, I suggest that it is mass economy, mass self-denial and mass sacrifice which is going to turn the scale of victory, and it is a Government which dares to demand mass sacrifice which will lead us to victory.
My right hon. Friend warned us that an emergency Budget is not the time to introduce new and untried methods of taxation, and, indeed, I should expect to be called to order if I made any suggestions on that line at present; but I hope that we may infer from my right hon. Friend's phrase with reference to new forms of taxation that he contemplates next April, if not before, a bolder course; that he will dare to lay the taxes where the votes are; and that the kindness and consideration that he will show to taxpayers will be the true kindness of leadership:
Such kindness as first treads the path of fear
Not tendance on the wounded in the rear.

6.20 p.m.

Sir Henry Fildes: I may be pardoned for intervening in this Debate, because I recollect well that my maiden speech in this House some 20 years ago, was in relation to the Excess Profits Duty. Let me say, in the first place, that I hope every Member of the House has studied carefully the OFFICIAL REPORT which reached us this morning. In it there is revealed to us a list of the persons who are or who have been employed by the Ministry of Information.

Mr. Deputy-Speaker (Sir Dennis Herbert): I do not see how the hon. Member can possibly bring that into a discussion on the Third Reading of this Finance Bill.

Sir H. Fildes: All I will say is that I hope the Press will publish that list in the middle pages of the newspapers.

Mr. Deputy-Speaker: I must ask the hon. Member to take what I have said as a quite definite Ruling and request him to make no further reference whatever to that subject.

Sir H. Fildes: I accept your Ruling, Mr. Deputy-Speaker, and apologise if I have transgressed, even if only for the limited period of one minute. I submit that we ought to take a long view with regard to this question of the taxation of excess profits. When the country is in danger and the Chancellor has to make provision for its defence, whose property is he defending? He is not necessarily defending the property of those people who have unsuccessful businesses and whose profits are negligible. But there are industrialists—I do not mention names, but we all know them—who for years have been making, perhaps, £3,000,000 or £4,000,000 a year and if they have been making that for four or five years before the war, they can go on making it without any fear of being called on to pay any special taxation in connection with the war. I know of one firm which made aeroplanes during the last war. They had no pre-war standard, but the Government said to them, "We must have your products." They were compelled to send the secret details of their drawings up and down the country to different works. The Treasury advanced £300,000 on mortgage for additions to buildings and plant. When the war came to an end they got an offer of

what appeared to be a satisfactory sum as compensation for the cancellation of contracts. Having done that the Treasury raised the Excess Profits Duty to 80 per cent. They took back 80 per cent. of the amount given by way of compensation for the cancellation of the contracts. Then the Treasury came in and asked those people to repay the £300,000 of mortgage debentures on buildings and machinery, with the result that the business had to be sold to meet those charges.
I say that that is grossly unfair and that the system is wrong. We say to people who have been making £3,000,000 or £4,000,000 a year profit before the war that they can go on making it, but if a man is producing a war requirement which is of advantage to the country and will help us to achieve our end we call upon him and we take 60 per cent. of his profit and he is not allowed more than a limited sum for managing his business. We have seen this in the case of firms in the North, for instance, in the Newcastle area. In one case, the will of the head of the firm was proved for something like £4,000,000. Money was borrowed from the bank to help to pay the Death Duties. Two years after the war was ended, the firm had not realised enough money to pay back what had been borrowed from the bank. When war comes businesses which may have done little or nothing for a period of 15 years are brought into the picture and we say to those people, "Although you have been making nothing during the time of peace, you can be useful to us in the time of war and we propose to penalise you on account of that fact."
I beg of hon. Members to look at the question from that point of view. If the burden is to be fitted to the back which has to bear it, you should reduce the Excess Profits Tax and, if you like, increase Income Tax all round, over a certain figure. The reason why we had such a disaster at the conclusion of the last war was that with duties of one kind and another we shut up so many businesses that we created a measure of unemployment which was deplorable. I do not want to see that happen again and I submit that people who have been making £3,000,000 or £4,000,000 for a number of


years past are better able to pay than people who have no pre-war standard at all.

6.27 p.m.

Mr. David Adams: I desire to detain the House for a short period on this occasion as there have been few opportunities, during the discussions on the Finance Bill in Committee, of making any observations on the points which I intend to raise. I feel that as the Bill is now passing from this House it is appropriate that it should go hence with our condemnation of any of its features on which we feel condemnation to be justified. On two main points, one the reduction in the child allowance and the other the reduction in the earned income allowance, I regard it as unsound in principle and unfair in practice. Moreover, I find that this Budget, more than any other Conservative Budget of which we have had experience, displays an unjust percentage of increase in relation to certain classes of taxpayers. The proposed new scale of imposts shows a sharply diminishing rate of increase as we come to the higher levels of income. For instance, a single man with an income of £130 a year suffers an increase of 469 per cent. in a full year. A single man with an income of £250 a year suffers a lower percentage of increase, namely 243 per cent.; a single man with £1,000 a year suffers the substantially smaller increase of 145 per cent.; and with £2,000 per annum he has an even less proportionate amount of increase, namely, 141 per cent.
This would be illogical enough even in the case of single men, but the favouritism shown by the Budget to rich people is proportionately much greater where they have family responsibilities. The poor person and the rich person with families are not, however, placed in parallel positions, the wealthy being highly favoured. Take the case of a man with £400 a year. A single person's increase is 163.3 Per cent.; if he is married, without children, it is 242.6 per cent.; if married, with one child, 320.3 per cent.; and the crowning case, I think, in the whole Budget is that of the married person with £400 a year and two children, who has an increase in a full year of no less than 712.8 per cent., figures which would lead me to

assent to the observation made by the "Times" about the Budget, in which it was stated by the "Thunderer," with reference to the reduction in the child allowances, that
this could only have occurred to a mind which preferred tidiness to foresight.
That really indicates the lack of foresight which the Chancellor had in framing the Budget. These amazing changes are grossly and manifestly unfair. If you go into the higher region and take the case of the £2,ooo-a-year man, you find that, if he is single, he pays an increase of 141.8 per cent—he is carefully protected by the Chancellor—but if he is married, without children, he pays 145.7 per cent., as against the person with £400 a year, whose increase, if he is without children, is 242.6 per cent., but for his richer brother if he is married, with one child, it is 144.5 per cent., and if he is married, with two children, it is 145.9 Per cent. One would have expected that the Chancellor, in a period of warfare, when the attention of the country is naturally directed to the sharp diminution in the increase of our population, would have shown special leniency towards people with children, but the tendency of this war Budget is to make their burdens very much heavier and to discourage the having of children, particularly among the poorer sections of the community. It is true that married people with two children do not pay anything if their income is less than £350 per annum, but immediately after that the increases are substantial and might indeed be termed crushing. The £500-a-year man, if he is single, has an increase of 155 per cent.; if he is married, with no children, it rises to 177 per cent.; if married, with one child, the increase goes up to 236 per cent. and if married with two children it rises to 330 per cent. There we see alarming increases imposed upon persons who dare to have families. It is interesting to note, however, that the richer families are not penalised to anything like the same degree, because the £2,000-a-year man, if single, has an increase of 141.8 per cent., but only of 145.9 per cent. if he has a wife and two children, so that the middle class and the poorer sections of the community who are endeavouring to raise a family are really penalised under the remarkable scale of increases which the Chancellor has sub-


mitted to this House in this Bill, to which we are to give, I understand, the Third Reading without a Division to-night.
In the case of the single person with an income of £130 a year, his increase is 469 per cent., and there is a progressive decline down to the person with £2,000 a year, whose percentage increase is only 141.8 per cent. In proportion to the increase in his wealth, the percentage increase in his taxation diminishes, when, unquestionably, it ought to rise. There is the same story with a married couple with two children, where you have this striking situation, that while a £400 a year person has an increase of 712.8 per cent., the person with £100,000 a year has an increase of only 120.19 Per cent., clearly confirming the point which I have ventured to submit to the House. I am not opposed to sharp increases of taxation, being an Income Tax payer myself. I have, however, the strongest possible resentment against unjust increases imposed upon other sections of the community who happen to be on the lower income level.
It certainly seems to me a very staggering outlook for the British people if the Government's prediction, which apparently has been made, that the war may continue for a further three years at least, proves to be true, and we are to have additional war Budgets from time to time. If they are to be framed on the basis of this Budget, then we can expect another sharp increase in the diminution of population, and we shall see a sharp increase in the impoverishment of the lower sections of the community, unless some new and additional forms of relief are to be found for them. It has been pointed out to the Chancellor how the taxation of land values would bring in substantial sums without injury to those who own the land, and a 2 per cent. tax upon the known wealth of the country would bring in a revenue—

Mr. Speaker: There is no taxation of that kind in this Bill, and the hon. Member must deal only with the taxation which is in the Bill.

Mr. Adams: I am afraid that I was digressing a little from the strait and narrow path which leads to the great place. Although we are not to have changes in this Budget such as we have pointed out ought to be made, there is a clear and imperious case in subsequent

Budgets for a diminution of the wide disparities which prevail in this Budget, particularly those between rich and poor.

6.42 p.m.

Sir Frank Sanderson: We have just listened to an illuminating speech showing the abnormal increases of direct taxation upon the smaller taxpayers and comparing them with the rates which will be paid by the larger taxpayers. So illuminating are the figures which the hon. Member gave that I should like to quote two of them. He stated that the increase of direct taxation paid by those who enjoy an income of £130 a year will be no less than 469 per cent., and that an income of £400 per annum would bear an increase of tax of 712 per cent. Those figures may be correct, but when we consider the higher incomes, it is only fair, in order that we may judge the rate of taxation which is levied, that I should draw attention to the fact that if there were an increase of only 20 per cent. the whole income would be taken in taxation. It is important that hon. Members should appreciate that you cannot increase the higher incomes more than 20 per cent. because it would make the taxation slightly in excess of 20s. in the £.

Mr. David Adams: The increases which I quoted are the increases over the present amounts which are being paid.

Sir F. Sanderson: I appreciate my hon. Friend's point, but when he reads the OFFICIAL REPORT in the morning and studies what I have said he will find that I do not exaggerate the position when I say that it would not require an increase of more than 20 per cent. to make the taxation over 20s. in the £. I wish to make reference to the Excess Profits Tax, which has caused more general discussion in the House to-day than any other tax. I would be one of the last to raise a voice in favour of anything which would make it possible for industry to make excess profits during war time, but there are many industries which have during the last few months, and which will during the next year or two, should the war be prolonged, increase output, not by 20 or 30 per cent., but by 500 or even 1,000 and more per cent. In such cases, where small businesses are devoloped during the process of the war, it is inevitable that increased profits would be made. The general standard is so low that it is only the development of such businesses during


wartime that would create profits which would not be made at any other time, and the whole House desires to see the Chancellor take his full quota of those profits.
On the Committee stage I referred to the abnormal profits which were made during the Great War in the shipping industry and I desire to put this point to my right hon. and gallant Friend. While I appreciate that the shipping industry during the Great War was subjected to Excess Profits Duty, we know that vast profits were made by virtue of the fact that business was done in the buying and selling of ships. I cannot see any difference between buying a ship and selling it at a considerable profit and buying a cargo of grain and selling it at a considerable profit. Can my right hon. and gallant Friend give me an assurance that the profits made by the buying and selling of ships will be subject to the Excess Profits Tax?
With the considerably increased taxation and the complexity of the method of arriving at the exact amount which should be subject to direct taxation, many industries and individuals have to seek the advice of accountants. Their costs in this connection run into large figures. It must be to the advantage of the Chancellor, as much as to the advantage of the taxpayer, that the amount subject to taxation should be accurate. Would my right hon. and gallant Friend consider between now and the next Budget making a concession which would allow of the deduction of accountants' fees before arriving at the net income upon which an individual is assessed for his taxation?
Another point to which I wish to call attention is that many industrial concerns have as a precautionary measure reduced their interim dividends and in many cases passed them altogether, while others have passed their final dividends, and even the preference dividends, where there is little or no likelihood of these not having been earned. While taking all reasonable precautions, I consider companies should pay dividends wherever possible, because to deprive the small investor of his income causes not only severe hardship but will do much damage to trade generally, beside reducing the value of industrial securities. It is important in war-time to refrain from unnecessarily reducing the market value of securities. The import-

ance of maintaining the value of our national assets is frequently overlooked. A convenient illustration is the case of the railways. If the railways were not to receive fair consideration the result would be a considerable depreciation of one of our greatest national assets. The importance of maintaining it is that it will enable those who will help to finance the war to lodge securities with their banks and to borrow the money with which to subscribe towards the great loans which will have to be raised. So I say deliberately that it is in the national interest that we should do everything possible not to deflate the value of the securities of our great national assets.
We are getting towards the end of the Third Reading of a Budget which will go down to history as the Budget which passed through this House in the minimum space of time and raised the maximum amount of revenue. I submit that the manner in which it has passed through the House is due to a great extent to the dexterity with which it has been steered through all its stages both by the Chancellor of the Exchequer and the Financial Secretary to the Treasury. It is a Budget which will be borne with fortitude, though undoubtedly it will affect the economic life of the country and affect the customary standard of living in every household, however humble or however rich. It is a significant fact that neither in the City of London nor among the great industrialists of the North, which I frequently visit, have I heard any adverse criticisms of it. All are willing and anxious, as never before, to make their full contribution to the prosecution of the war to a victorious end.

6.55 p.m.

Captain Cazalet: Since the Budget was introduced I have not heard many of the Debates, but I have heard some of them, and on the whole I gather that the general feeling of the House has been one of approval. Such adjectives as "bold" and "courageous" have been applied to the Budget. I am afraid that my own views of it are somewhat less flattering. I think it is an unimaginative Budget, unwise in certain directions and definitely foolish in certain particulars. I think it is unlikely to produce the revenue estimated, and such money as it does produce will be got only at the maximum of inconvenience to the payers and with con-


siderable distress and dislocation of life for many innocent people. I think that is stating the effects of this Budget mildly and moderately. Honestly, it is not a question of personal sacrifice. Of course no one exactly likes paying, but I think everybody agrees that the great bulk of the people are prepared to give everything, life itself if necessary, in order to win this war, and yet I feel there is a very legitimate criticism to be made against the methods employed to raise the money.
We have huge increases in both direct and indirect taxation, and I do not believe that is either the best method of getting the money or of maintaining the normal life of the country, which must go on. After all, no one objects—perhaps "objects" would not be the right word, but no one is opposed—to paying a high Income Tax and Super-tax if he has an income upon which those taxes fall. Let the Chancellor say that the Income Tax must be 7s. 6d. or 8s. if he will, but to put on the whole increase up to 7s. this year will not only have a retrospective effect upon Income Tax payers but will, I think, make it more difficult to get the money. Surely the better way would have been to add 6d. now, 6d. or is. next March and another 6d. if necessary later. In that way we should have given the direct taxpayer time and opportunity not only to pay but to adjust his life to the increased taxation. I venture to prophecy that next March there will be thousands, even tens of thousands, of direct taxpayers owing the Government large sums of money. Not that that is of very great importance. In the past people have been able perhaps to meet their taxes by the sale of capital, but the state of the capital market to-day does not. make one believe that they will be prepared or able to do that, even if they wished to do so.
But it is not of vital importance that (a) large number of taxpayers should be owing money to the Government. What is important is that we shall be throwing out of work thousands of innocent people whom I do not believe the war effort will be able to embrace in its activities. They will suffer as a consequence of this increased taxation. I know quite well that a great deal of the "old order," as it has been called, will have to go. I believe that this Budget will, both immediatelv

and permanently, alter the social and economic life of the countryside to an extent which it is difficult to envisage. If that "old order" has to go, let it be a gradual change. do not let it be an immediate shattering of an organised society which has made great contributions to the life of this country, thus imposing unnecessary and cruel hardships on a very large number of people.
Then, after having imposed these taxes, what does the Chancellor say? He says, "Save, spend and do not dismiss anybody." Is that a joke, or does the Chancellor not want people to pay their taxes? He cannot have it both ways. What are these taxes going to raise? An infinitestimal sum of money compared with what we shall have to spend next year on prosecuting the war and out of all proportion—if the Chancellor gets the return from them that he expects—to the suffering and hardship that will be imposed on a large number of people in this country.
Again, the deductions in the allowances for children are a great mistake. Those with small incomes are already badly hit by the war and many are in reduced circumstances. Some have joined the Army. A man in my constituency had a job at the Post Office at between £400 and £500 a year. Before the war he joined some Territorial organisation and he has now been called up. He has an income in the neighbourhood of £150 a year and he has a wife and two children. Probably that man had entered into obligations with regard to his children. To cut the allowances for children at this moment is a grave social mistake and may go far towards damaging the educational system in this country. Those cuts are tiresome and a nuisance to the parents; they may be disastrous to the children. These deductions may represent a real tax on many homes in this country. It comes, I understand, to something in the nature of 10s. per person per year which, in a family of four, means a tax of £2 per year. It is obvious that in the course of the next few years there will be a measure of inflation in this country and there may be demands—which will be met, no doubt —for increases in wages. I believe it takes about is. a week increase in wages to make up the effect of the increase in the Sugar Duty. There is no compensating factor for any appreciable portion of


what the direct taxpayer is to be called upon to pay.
Old age pensions have been mentioned. I have always taken the view that there was an unanswerable case for making up those pensions to a sum comparable to that paid in unemployment insurance where, I think, the figure for a man and wife is about 25s. or 28s. a week. The case is just as unanswerable now, and I would welcome any measure which would bring an increase into effect. I realise that I cannot oppose the Budget. I have to support it and I have to pay if I can. Perhaps my gloomy prognostications and prophecies might not come true. I hope they will not. Of course, we all have sympathy with any Chancellor of the Exchequer in the present conditions, and in the grim task which lies before the right hon. Gentleman, but I felt that I must make my small protest against what I believe to be a deliberate and unnecessary attempt to make the lives of many ordinary citizens even grimmer and blacker than they are to-day.

7.4 p.m.

Mr. Vyvyan Adams: As I intend briefly to examine the effect of Income Tax upon various levels of income, I think there must be a sort of avuncular relationship between myself and the hon. Member for Consett (Mr. David Adams), although I do not share his melancholy prognostications about the birth rate. The war has already produced a spate of marriages; and marriages have been known to precede births. I have been wondering how I could make relevant to a Third Reading Debate on the Finance Bill a plea for better old age pensions. This delicate inhibition did not discourage the hon. Members for Llanelly (Mr. J. Griffiths), East Birkenhead (Mr. G. White), and Leigh (Mr. Tinker), and the hon. and gallant Member for Chippenham (Captain Cazalet), but, in order to be strictly in order, I have decided upon a certain form of words. It is this:—The Finance Bill provides for the expenditure of tens of millions of pounds on the health services, including old age pensions. Ten shillings a week is better than nothing, but 15s., or even 12s. 6d., would be better still. This year's Finance Bill

must be treated as the basis of next year's and that of the year after, but by then I hope to see some upward adjustment, if necessary with increased contributions. When an old man or old woman is near to destitution—

Mr. Speaker: The hon. Member cannot pursue that line of argument because there is nothing at all in the Finance Bill about old age pensions.

Mr. Adams: I hope that you will allow me to point out that in at least three speeches old age pensions were the main burden of the remarks of hon. Members. Having said that, I assure you, Sir, that the rest of my remarks will be prosaically in order.
Seldom do I find myself able to agree with the "Times" newspaper, but on 5th October it had a leading article which I was bound to admire. It was upon the subject of bureaucracy. This practice of bureaucracy, which is extending its tentacles right through our social and commercial life to-day, means death to all trade and enterprise. The Chancellor of the Exchequer whom—to quote the Senior Member for Oxford University (Mr. A. Herbert)—we all admire and love, expects us to pay a mountainous and indeed a fantastic Income Tax; simultaneously the Government are risking bludgeoning trade to death with the club of bureaucracy. The individual could and would pay the tax, but I fear that numbers of firms may have to face loss and bankruptcy. It is not rational for the Chancellor to say "Spend, save and pay," at the same time that the exasperating interference of officialdom is darkening life and destroying the enterprise of commerce.
Men of business are, on the whole, as patriotic as anyone. They are perfectly willing to supply the revenue. Indeed— whatever theoretical objections His Majesty's Opposition may have to the industrial system—it is the men of business who are the main source of revenue. It is foolish to cramp their activities by every sort of needless interference. I will give an instance which lately came to my attention. I am informed that the Metal Corporation has been taken over by the Government and is, in consequence, able to put all its rivals out of business. That is one of the consequences of the emergency which has accompanied the war.


So much for men, in their commercial and business capacities.
I now wish to consider, if the House will bear with me, the effect of the Budget upon the individual citizen. I take quite a different view of this matter from that of some hon. Members who have spoken. The rigours of the Budget are great but they can easily be exaggerated. I thought that the hon. Members for East Birkenhead and Chippenham came very near to that vice of exaggeration—if I may so call it. I do not wish to incite the Chancellor of the Exchequer or the Financial Secretary to the Treasury to any unnecessary and adventurous raids, but I want to say that we could stand even heavier burdens than are contained in this Budget. [Interruption.] I mean the taxpaying community, particularly the Income Tax paying community, about whom I am going to speak if the hon. Member for Kennington (Mr. Wilmot) will allow me to follow my argument without interruption. During the period when I have been in the Chamber most attention has been concentrated on Income Tax. I ask whether the level of Income Tax is so very dreadful after all. I make bold to say that this Budget, which we are bound to pass, is in fact perfectly endurable. I do not know whether any Members of this House belong to the very rich class. If they do, I hope that they will abstain from saying—if they have any temptation to say it—that their world is ended. I do not believe that that is so.
I would remind the House of a few rather consoling figures, derived from the table published at the time of the Budget statement. I will begin at the bottom of the scale of the Income Tax payer. In 1941 a bachelor earning £350 a year will pay £40, but a married man with three children who earns a similar income will pay nothing. In 1941 a bachelor earning £1,000 will be left with three-quarters of his income, and if he earns as much as £3,000 a year the Chancellor will generously leave him in possession of two-thirds of that income. It is not until the bachelor earns the considerable income of £9,000 a year that he will have to pay 50 per cent. in Income Tax. I will now address myself to the bachelor with an income of £150,000 a year. I cannot consciously see him, though I suppose he must exist somewhere, because he figures in these tables of the Chancellor of the Exchequer. Even that somewhat

mythical person is going to be left with £26,000 for 12 months. He is able patriotically to consume any quantity of cigars, cigarettes, sweets, and bottles of whisky, though he will be able to use only one of his cars, and that rarely. I think this individual may be invited to cheer up. On the Second Reading the Financial Secretary quoted the younger Pitt. Perhaps I might be somewhat more contemporary, and quote Tennyson:
Though much is taken, much abides.
That bachelor, with his enormous income, may be able to save a few coppers to invest in War Loan, and when his fortune shows some signs of obstinately increasing, under the pressure of war prosperity, he may be of some value if we are eventually reduced to the expedient of a levy on capital. I once heard the First Lord of the Admiralty say that just after the last war he was himself in favour of that expedient. We can endure this Budget, and much besides. I suppose the most heroic figure to-day is the Chancellor of the Exchequer, From 1931 to 1935 he was Foreign Secretary, and had to witness the death of disarmament and democratic Germany. No doubt those pregnant incidents caused him great sorrow, but a fortnight ago, unabashed and unperturbed, he came down to this House and called upon his fellow-citizens to pay the bill. He must, among his colleagues, be much beloved—or well-liked, as we say in the north—because one would normally imagine that someone else might have been called upon to find the money to pay for the wreckage of our hopes, and to win the war. Once, when I recently criticised the Chancellor of the Exchequer, he informed me that he did not admire long speeches or laborious criticism. So I have a double reason for not prolonging my observations. He is not here to listen to what I have to say. Therefore, I sit down.

7.16 p.m.

Captain Hammersley: I shall not seek to follow the hon. Member for West Leeds (Mr. V. Adams) in any long review of the Finance Bill. I wish to refer to one point, which has been already raised by previous speakers and which has been commented upon by many. It concerns the Excess Profits Tax. I do not think that, from the comments that have been made, one can come to any conclusion other than that Clause 13 is, in many respects, unsatisfactory and unfair. I


read the report of the Debate in Committee, and I noticed that the Financial Secretary, answering some points of criticism, said:
I do not hold out any particular promise with regard to any form of words, or anything of that kind, but the inquiries that are being made, to which reference has been made, will no doubt cover this matter among the many other matters that will be put forward, and it will be in the light of all the circumstances that my right hon. Friend will finally put forward any Amendments which he thinks it right to include in the next Finance Bill."— [OFFICIAL REPORT, 5th October, 1939; col. 2174, Vol. 351.]
I take it that the opinion of the Committee at that time was that a certain unsatisfactory situation had been proved, and that the Chancellor of the Exchequer was, at a later stage, to introduce Amendments. One of the trades which was mentioned as being most particularly affected by the unfair selection of the standard profit was the cotton trade. In the selection of years are the years 1935, 1936, and 1937. They were disastrous years for the cotton industry, so disastrous that this House thought it desirable to introduce special legislation to deal with the situation. I myself sat on a committee upstairs for several months, during which we discussed an Enabling Bill to provide for the Lancashire cotton trade a reasonable level of prices and of profits. We are in the peculiar position that the President of the Board of Trade has endeavoured to give a reasonable level of prices and profits to the Lancashire cotton trade, and the Chancellor of the Exchequer is introducing legislation to make that impossible.
I will just reinforce what has been said by other hon. Members about that, and suggest that it is not satisfactory to leave the matter in the position that certain Amendments will be introduced in the next Finance Bill, because we shall have a period of grave uncertainty. It seems to me that in the next few weeks the Chancellor of the Exchequer ought to make some statement. As I understand, this Finance Bill lays down a chargeable accounting period, which begins on 1st April this year. That means, in effect, that whatever is passed under this Bill will be the law of the land and, therefore, although the Chancellor may agree that the position is unfair, he will not be able to correct the situation unless he introduces retrospective legislation. I

shall be glad if, when the Financial Secretary replies, he will indicate whether or not it is the intention of the Chancellor of the Exchequer, when he makes these Amendments, to make them retrospectively.

7.21 p.m.

Mr. John Wilmot: I rise only to ask the Financial Secretary whether, when he replies, he will give me the answer to the point which I raised on the Committee stage and which the Chancellor of the Exchequer was good enough to promise would be answered. The Financial Secretary will recall that the point which I put to the Chancellor of the Exchequer was that it had been represented to me that the effect of a decision by the Special Commissioners was a very peculiar one, and in view of the widespread voluntary evacuation it has rather an important bearing at this time. It was represented that if a tenant had evacuated his premises and removed his furniture, and the premises, therefore, were no longer liable for rates, in those circumstances, if the tenant in honour of his lease or agreement was continuing to pay his rent to his landlord although he was not occupying the premises, the landlord receiving such rent was exempt from tax in respect of it. That seems to me to be an important point at this time when there are a large number of premises lying empty where the tenants are, in honour of their obligations, paying their rents. The Chancellor of the Exchequer promised to look into the matter, and said that if this was an illegal method of tax evasion he would stop it. I shall be glad if the Financial Secretary will be good enough to let me know about it.

7.23 p.m.

Mr. Pethlck-Lawrence: The Debate has run for a considerable time—a little longer than some of us supposed—and I certainly have no intention of detaining the House for more than a few minutes before we receive the reply of the Financial Secretary. There is only one matter, and only one aspect of it, to which I wish to draw attention, and that is with regard to the question of excess profits. I believe that a number of Members are under a slight confusion as to how excess profits arise. They arise in two clearly distinct ways. They may arise because some person or firm or company manufacturing an article that is in great need during the war takes advantage of the


public necessity in order, quite improperly and unnecessarily, to put up the price. Where that occurs a person is guilty of grave lack of patriotism, and if it were possible to punish him, punishment ought to be imposed. That is the first way.
Closely allied to that is a rise in prices due to quite a different cause, namely, that the Government have been guilty of bringing about inflation. If the Government were to finance this war in anything like the way the Government financed the war of 1914–18, creating very great inflation, windfall profits will fall to individuals owing to the rise in prices, which is a monetary phenomenon.
A third class of excess profits arises from an entirely different cause, which may be described as the fortune of war. The effect of war upon the national economy is to bring about a complete change in the things which are required by the people of the country as a whole. One thing which has legitimately been produced in times of peace and on which the person making it obtained a moderate and reasonable amount of profit is entirely dashed out of the way. The profit falls to nil because the number of articles produced is nil, or something very near it. On the other hand, at the same time, some other person who has been making an article which has perhaps had a moderate sale in time of peace suddenly finds himself called upon to manufacture and to sell perhaps five or ten times, it may be 50 or 100 times, the quantity he sold in peace-time. If that is the case, the manufacturer, without any desire to profit at the expense of the nation, may even, if he is sufficiently patriotic and public-spirited, cut down his price and profit per article, and yet, owing to the immense number of articles he makes, make a profit fabulously larger than anything he could imagine in the wildest dreams of avarice in peacetime. It is very important that the House should note these three classes.

Captain Hammersley: Is there not a fourth class? Is there not the case of the producer who, because of a declining world demand for a world-wide product, has been producing at a loss for a period of years, and then, owing to the circumstances of the war, makes large profits?

Mr. Pethick-Lawrence: I do not think that that is entirely a separate case. The

point I am trying to make is that this profit arises in a number of entirely different ways, and the House should be clear in its mind with regard to these differences. There will be cases where men will make profits simultaneously from several causes. Take such a very simple household article as the small torch that many of us carry at night in order to prevent tripping up off the pavement or being run over when we get into the roadway. It may very well be that at the outbreak of war some person who sold these torches put up the price, and because of the national need made a very considerable profit in consequence. It may also well be that a man who did not put up the price and try to make a profit out of the needs of the nation, might make a very much greater profit owing to the fact that at least 10 times more torches were likely to be required during the war than was the case before war time.
The people who are putting up prices ought to be prevented from doing so by the Government. I hope that in these cases the Government will not be content with the Excess Profits Tax, but will use every means in their power to stop illicit profits of that kind. The Excess Profits Tax in this case is not nearly sufficient. These profits ought to be stopped. I hope that the Chancellor of the Exchequer will be very careful that inflation does not take place, or at any rate not more than is absolutely necessary in order to see the war through. The third type of profit is where the legitimate field for the Excess Profits Tax comes in. These people are not criminal; in many ways they render considerable service to the community in having a great deal of foresight by getting ready to produce articles which the country greatly needs in time of war. The right method of dealing with them is by Excess Profits Tax, so that they shall be made to contribute to the benefit of the State and the prosecution of the war.
I want to refer in conclusion to one or two speeches made by hon. Members in different parts of the House and to point a moral. It was said, I think by the hon. Member for Walsall (Sir G. Schuster)—and there is a certain amount of truth in it—that it is not fair that because one company happens to have made fairly good profits before the war


it should escape, while another company which was in low water should be mulcted. But the real point is that we cannot proceed on lines of absolute justice in this matter. We can proceed only by rough-and-ready methods which do a fair amount of justice, because the conditions of war are so extraordinary and bring about such dislocation that complete equity between one individual and another cannot be entirely observed.
There are three measures of capacity for paying. There is the measure that comes about from having a high income, and this Bill in its earlier parts does take part of that high income by means of the enormously increased Income Tax which is being imposed. Then there is the measure of great additional prosperity due to what I called, in the earlier part of my speech, the fortunes of war. We are taking a large part of that by means of the Excess Profits Tax. But there remains a third measure of capacity, which is the possession of a considerable amount of capital wealth. In some shape or other there should be added to those burdens which are imposed in the Bill some form of tax graduated to the amount of capital wealth possessed by individuals and this trinity of tests would make I think the nearest approach to equity which can be done.

7.33 P.m.

Captain Crookshank: I must apologise to the House because the Chancellor of the Exchequer expected to be here to wind up the Debate, but the exigencies of war have taken him away. I am sure the House will understand that circumstances necessitate such sudden changes. There has been, as might be expected in this Third Reading Debate, a review of many of the proposals which my right hon. Friend put before the House less than a fortnight ago, and the discussion has ranged from very big things to small things. I have been asked to answer specific questions, and on the other hand I have been asked to consider the Budget in its wider aspect, so that it is difficult to find a middle way. Perhaps I might start with one or two of these smaller questions. The hon. Member for Kenning-ton (Mr. J. Wilmot) asked me to deal with something which he asked my right hon. Friend earlier. I have not been able to trace any actual case or decision

given which in any way makes am alteration in the law, but I think that, generally speaking, the position is as he put it and it does touch upon a very complicated matter of the relationship between assessments under Schedule A and rents actually paid. It is a very wide and complicated subject, and all I can say upon it is that these matters are at the present time under consideration. If any gaps require to be filled my right hon. Friend will make appropriate proposals.
The right hon. Gentleman who has just spoken gave us a very interesting speech —interesting particularly in the definition he gave of those kinds of excess profits which might arise. It was interesting also because he came to the correct conclusion that there was a class of profit being made which it was entirely right should come within the scope of taxation of this kind. It was interesting further because the hon. Gentleman who opened the Debate for the Labour party rather deplored the fact that we should be called upon to legislate about excess profits at all and he has been answered by my right hon. Friend. I think, if I may say so with respect to the hon. Gentleman who opened the Debate, that there seems to be some confusion about the term "excess profits." What is being taxed is the growth of profits over standard years, and it is not the same problem as the problem which people talk about in terms of profiteering and excess profits which are out of all proportion to what anybody might anticipate.

Mr. J. Griffiths: You call them excess profits yourself.

Captain Crookshank: Excess profits over standard pre-war years. There is a Section in the Bill which deals with firms building up new connections. That would come under the term "excess profits," but it does not necessarily imply that those profits are excessive or arise from profiteering. That is an instance where there may be confusion of thought. Now that we have done away with the Armament Profits Duty, which was specifically designed to deal with large profits in the armament industry, and was itself a tax on the growth of profits, we have extended that system to the whole of industry. Therefore everybody will now be under this legislation and pay not on excessive profits but on the growth of


profits as compared with the standard year which is an average of years prior to 1938.
The hon. Member for Walsall (Sir George Schuster)—I think as the result of something I said earlier with reference to Clause 13 (7)—said that nobody would know where they were. With all respect I think that is dealing with the matter far too largely. What that Clause deals with is not the whole question of Excess Profits Tax, but only those cases—which are not all cases by a long shot—where the profits of an industry in the standard years were not considered reasonable. The great bulk of firms will think those years were all right. It is not going to put all firms in confusion although some may be in doubt as to what will be taken into account. I really cannot anticipate that matter or take it further to-day. The hon. Member for Consett (Mr. David Adams) and the hon. and gallant Member for Chippenham (Captain Cazalet) told us that a reduction in the children's allowances would have a frightful effect. An instance was given of a man who earned £500 a year. I would again point out that the difference this makes to a married couple with two children with £500 a year earned income, is an extra tax of £3 15s.

Mr. Pritt: In justice to the hon. and gallant Member, he was referring to a man who had dropped from £500 a year to, I think, £150 a year, and who had also to lose his allowances.

Captain Crookshank: I believe he said he had joined up, but the hon. Member hung his argument on the income of £500 a year. Even in the case of the man with £500 a year and two children, the effect of the reduction is £3 15s. per annum as regards children's allowances. In spite of the prognostication of the hon. Member for Consett, I do not think this will have a serious effect on the birthrate. In reply to the hon. Member who read out a most terrifying account of the percentages of increased taxation on a wide range of incomes, of course, if he likes to discuss these matters in terms of percentages, no one can say him nay, but they are not very relevant. There was one case, I believe, of a married couple with two children where the tax went up from £1 13s. 4d. to £11 17s. 6d. in the next year. Anyone can see that if that is worked out on a percentage basis the dif-

ference is very large, but when you consider the effective rate of tax it goes up from 1d. in the £ to 7d. in the £.

Mr. Pritt: That is still a very big percentage.

Captain Crookshank: It is still a big percentage, but people do not pay in percentages; they pay in £s. d. The argument which the hon. Gentleman opposite is quick to use in regard to higher incomes applies also to lower incomes. It is what is left that matters.

Mr. David Adams: Surely an increase of £10 is excessive?

Captain Crookshank: I do not think it can be argued as being an excessive burden in the present situation. As my right hon. Friend explained in his Budget speech, it was decided that there should be these alterations in these allowances in order that there should be a different curve; my hon. Friend will remember his gesture when he pointed it out, how there was this great burden which had to be paid for and how it was only fair that everybody should make a higher contribution than that which they were already making. My hon. and gallant Friend the Member for Chippenham said he deplored this Finance Bill because of the infinitesimal sum which it raises. I must say that "infinitesimal" is hardly the word that I should have used in this connection. Most of the hon. Members, from whatever angle they were talking, have endeavoured to impress the Committee and the House with the terrific burden which has been placed on the taxpayers, and to say that £107,000,000 extra taxation this year and £226,500,000 next year as a result of these increases is "infinitesimal" is, I think, rather straining language. The figures which have already been discussed in this House show clearly that, terrible though it is, the burden has, in the view of my right hon. Friend, been spread as wisely as he knows how.
While we have noted the protests which have been made, and which I may say were not unexpected, I would like to say, as we take leave of this Bill this evening, that we do recognise that vast sums of money are being raised. We have the assurance, I think, of spokesmen in all quarters of the House that, in the words of the hon. Member for East Birkenhead (Mr. White), we are right in raising as


much as possible in taxation. That fundamental idea at the back of all these proposals has been accepted wholeheartedly, and the only questions have been what the taxation should be and who is to bear it. As long as time continues there will always be arguments on those points when fresh taxation is to be imposed. Fundamentally, the principle which underlies the Budget statement, and on which the Bill is founded, is that we should raise as much as possible by taxation now in order to finance the war; it has been accepted, and my right hon. Friend is very grateful that the House should agree with it. No doubt, burdens are being placed upon the taxpayers, but I believe, and I think the House believes, that they will bear them in the confident hope that, with the financial sacrifices involved, they will be bringing nearer the day of victory.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

EDUCATION (EMERGENCY) BILL [Lords].

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.)

CLAUSE I.—(Suspension of operation of Sections 1 to 6 of Education Act,1936.)

7.49 p.m.

Mr. Lees-Smith: I beg to move, in page 1, line 13, after "but," to insert "such sections or any of them."
This Amendment should, of course, he read together with the second Amendment. They are intended to implement the Amendment of which I gave notice when I was discussing this Bill on the Second Reading yesterday. The matter is very simple and can be put shortly. The Bill that we are discussing suspends the Education Act, 1936, until, broadly, the end of the war. We have accepted that suspension, but we wish to be free when it comes to an end to propose that the Clauses with regard to beneficial exemptions shall be left out and that there shall be a clear-cut raising of the school age to 15. I predicted yesterday that, as a result of the war, there would be a great change in our perspective as to the best treatment of children, and I am confident that

one result of that change will be that it will be generally agreed that if you are to develop fully the potential qualities of children of 14 the best place to do so is in a school. My views on that subject were reinforced by the nature of the Debate which followed. We want to be able to raise that issue, but the Bill as it is drafted would not enable us to do so. It merely says that the Act of 1936 shall be brought into operation as the Board of Education may by order determine. That means that the Board of Education will make an Order, and that will be the end of the matter. There will be no opportunity for any debate or division in the House. This Amendment and the consequential Amendment which follows would make a simple alteration. There would be a draft Order introduced by the Board of Education which could be discussed by the House and modified by the House. In those circumstances we should be able to ask the House to discuss the particular point I have mentioned and to come to a decision upon it.

The Chairman: I take it that the right hon. Member wishes this Amendment and his consequential Amendment to be discussed together? I think that would be for the convenience of the Committee.

Hon. Members: Agreed.

7.53 P.m.

Mr. Tomlinson: I hope that the Government will accept the Amendment. It simply asks that the House should be given an opportunity to discuss whether or not a particular Section in the Act shall operate. Everybody who is familiar with the working of the Act realises that this was a blot on what might have been called a fairly good Education Act, and it is with the object of attempting, when the time arrives, to remove that blot that the Amendment has been put forward. Unless the Amendment is accepted, the Government of the day will be bound to take up the attitude—and one would not blame them—that the question is too big, and that if a new Education Bill was introduced the whole question would have to go into the melting pot. The Amendment makes it possible for the Government of the day, when the time arrives for the Act to be put into operation, to say without any loss of dignity that this question can be discussed. It


has not been suggested that the present Bill has been introduced because there is any desire to limit the opportunities of children or that there is a need for child labour. The only reason for its introduction is that there are not facilities for giving the education which is required by children between 14 plus and 15. It seems to me that when the war comes to an end, when the evacuees have returned home, when all the work that has been done by education authorities in the country to make provision for these children is available again, that an opportunity should be given to all children to take advantage of the education which will then be available. That can only be done quickly if the Amendment is accepted and the House of Commons is in a position to come to a decision on the matter. For these reasons I hope that the Amendment will be looked upon favourably. It does not prevent the Government doing anything at the moment they want to do, and it leaves the door open when the time arrives.

7.55 p.m.

Mr. Edmund Harvey: I desire warmly to support the Amendment. Yesterday hon. Members on all sides of the House expressed a hope that this regrettable Bill made necessary by the event of the war should in the end open up the possibility of a further advance in education. The Parliamentary Secretary to the Board said that the Board were determined to exploit the situation to the full, but, unfortunately, other people will exploit the children, and it is necessary that we should take account of this. I hope the Parliamentary Secretary on behalf of the Government will be willing to keep the door open for the Government and this House to have an opportunity of making the Act a much better Act than it is to-day. It is a very simple thing that is being asked. It is not asking for an immediate decision but that a way should be left open to Parliament when the Act is brought into operation to bring it into operation in fullness, giving the largest possible benefit to the children. I am sure that the heart of the Parliamentary Secretary is with the purpose of the Amendment, and I hope he will be able to accept it. We do not know the nature Parliament will take when this emergency is over. The Parliament which during the war passed the

great Act of 1918 was succeeded by a Parliament which, to put it mildly, took a less keen interest in education, and the results were not what the framers of the Act of 1918 hoped they might be. I hope that this occasion will be taken to mark the intention of Parliament, even under this grave emergency, to do the best when the time comes for the children of this land.

7.59 p.m.

Mr. Kingsley Griffith: I want to add my voice and hope that the Parliamentary Secretary will be able to accept the Amendment. The conditions under which the Act was passed, like nearly everything in our lives, are now in the melting pot. Nobody knows in what way England will emerge, and for that reason the Amendment is necessary, so that when the time comes Parliament will have an opportunity of reconsidering the question and giving the very greatest number of children the best possible facilities for education.

8.0 p.m.

Mr. Collindridge: I do not think the Parliamentary Secretary appreciates fully the sacrifice that some of us are making in accepting generally the idea put forward in connection with this Bill. Some of us who represent mining constituencies have in view not only that the raising of the school-leaving age was helping our children educationally, but that those children were being prevented by the raising of the age from entering the very dangerous occupation of mining, wherein so many of them would be subject to accidents, fatal and otherwise. If the Minister would accept the Amendment it would fill us with some hope that at the earliest opportunity, when this emergency is over, this privilege will be restored, which will help our children educationally and prevent them from having to enter the mining industry. I hope on that account the hon. Gentleman will look favourably on this idea, and will think of the generous way in which Members of the Opposition are receiving the principle of the Bill.

8.2 p.m.

Mr. R. Morgan: After the speech that I made yesterday I feel that I must support the Amendment. I talked yesterday about the exemptions, and it seems to me that if we have to postpone this Act, as we are going to do, we ought at least to


have a chance of putting it forward again without that invidious distinction. If this is to be held up for three years, surely there must be very grave and good reasons why we should re-examine the whole terms of the Bill. It is very difficult at times to understand what is the real meaning of this very cleverly worded Amendment. If I read it aright, it will give an opportunity of reviewing the Act when it comes into force. After a lapse of time, when we ought to be able to say this is overdue by one, two or three years, we ought to be able to say that there are certain provisions which were made to ease the passage of the Bill and they ought to go. The least we can do is to ask the Government, when it comes before the House, to give us a chance of looking through the whole of the Bill and saying, "It is high time now that Clause so-and-so should not operate." If I have read the Amendment aright, I feel quite certain that I shall have to support it. In the light of the interpretation that I put on it, I think we ought really to ask the Government very seriously to consider the proposal made by the Opposition.

8.5 p.m.

The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): I should like at the outset of my remarks to call attention to the Title of the Act. It is:
An Act to modify the Provisions of the Education Act, 1936, in relation to the coming into operation of Sections 1 to 6 of that Act.
The purpose of the Amendment, as the right hon. Gentleman's speech showed, was to make it possible, when the time comes for raising the school-leaving age, to repeal by order those Sections of the Act which relate to exemptions for beneficial employment.

Mr. Pethick-Lawrence: Should it not be put the other way? The object is to enable the Minister, or the House, to restore part of the Act without restoring the whole Act.

Mr. Lindsay: That depends entirely on the nature of the modifications. I think I put it frankly when I said to repeal those sections of the Act; it was made perfectly clear by the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) that the object is to get rid of the

exemptions. The only question is whether this is the way to do it. I put it to the Committee that to tack on to a suspensory Bill a vital alteration in principle is not the way. I know that there are Members on both sides who dislike the exemptions. We have had experience in the last few years of the complications which local education authorities have been up against in trying to work exemptions. But that does not seem to be the point. The point is whether any action can be taken in regard to the matter and, if so, what action it should be; and this, it seems to me, should be left to the consideration of the Government when the war comes to an end and the Act is restored. I put forward one quite practical Consideration. The Board could not possibly bring the Act back without at least six months' notice to local education authorities. An enormous amount of preparation would be required and there would be very considerable discussion between the Board and local education authorities, which would afford perfectly good opportunities for promoting amending legislation. I should myself like to look at the whole question afresh, but at present all we are doing is to suspend the Act in its present form. I am willing to see if it is possible to get an Amendment drafted to get the general principle reviewed at the end of the war but to tack on to a suspensory Bill an important modification in a principle which was freely debated and accepted by the House is not, I think, the best method of procedure.
I do not wish to be pedantic in the middle of a war on procedure, but that is the view of the Board and I should be very sorry at this stage, when most of us are in agreement that we want to raise the school-leaving age in the best possible way, to see a Division over a purely suspensory Bill. Therefore, I appeal to Members on all sides of the House—[Interruption.] The right hon. Gentleman says "appeal in vain." I think it is not quite fair to put to the Committee, as has been put by some, that this is not an important modification. I should have thought that was agreed by anyone who had been through the battle for raising the school-leaving age; certainly those who sat on the committee must know that it was very keenly contested. Therefore, to push this important point of principle into a Bill of this sort


does not seem to me to be the best way of conducting Parliamentary procedure. If it is a question of having the matter raised and if it is feared that this will be done by Order, the House having no chance of discussing it, my reply is that I think there are plenty of ways in which that could be dealt with. Indeed, I should be willing to draft an Amendment straight away to meet such an emergency. Therefore, I hope that hon. Members, with that assurance and the very full explanation that was given yesterday, will agree—

Mr. Lees-Smith: The Parliamentary Secretary said that he would be willing to draft an Amendment straight away. Will he let us see it during the course of the discussion?

Mr. Lindsay: I want to be clear as to the purpose of the Amendment. Its purpose would be to bring this matter before the House again, but not to allow for a modification; in other words, it would allow a negative, it would allow discussion, but it would not allow modification. [Interruption.] That is why I think it is much more honest to say exactly what we mean. What hon. Members opposite want is to make, in a suspensory Bill, an important modification of principle. I am afraid that the Government would not be prepared to accept that without further discussion after the war.

Mr. Jagger: May I correct a very grave misstatement of the hon. Gentleman? We want only to make it possible to discuss the matter.

Mr. Lindsay: I see the hon. Member's point. What hon. Members opposite, and indeed hon. Members on all sides, have made clear is that they wish to see the exemption Clauses repealed. I think there may be a case for that. I am not saying there is not. What I say is that this is not the time to attach Amendments to a Bill, the whole object of which is to suspend the Act. One hon. Member said that great sacrifices were made by hon. Members opposite in agreeing to this Bill. I should like to say that hon. Members on all sides regret very sincerely that this had to happen. But as we have agreement, do not let us add to this Bill; if a change is needed, let us set about it after the war in a straightforward way. I believe that will be possible. We cannot possibly foresee what the conditions will be after the war, but at any rate, it

is inevitable that some method will be found of bringing this matter before the House and that there will be a full-dress Debate on it.

8.14 p.m.

Mr. Ede: In listening to the Parliamentary Secretary's speech, I could not understand why he could not accept the Amendment. After all, here we have six Clauses. Clause 1 raises the school-leaving age; Clauses 2, 3, 4 and 5 are concerned with exemptions; and then there is Clause 6, which amends the previous Act and has nothing to do with exemptions. The effect of carrying the Amendment would be that any Government in office at the end of the war—and if one thing is certain, it is that it will not be the present Government—would be in a position to draft an Order that would bring back all the six Clauses or any of them. Suppose the Government at that time was a better Government than the present one—[An HON. MEMBER: "Impossible."] It could not be worse. Suppose that it was a better Government and that it proposed to bring back Clauses 1 and 6, it would then be open to the House to move that Clauses 2, 3, 4 and 5 should be brought back as well. On the other hand, if it were proposed to bring back all the six Clauses, it would be open to the House to move an Amendment to the Order so as to get what the House wanted. I cannot see why the Government should object to that.
None of us can foresee exactly what will be the condition of the country at the end of the war, but this is certain, that there will be millions of men to be demobilised for whom occupations will have to be found in civil life. Therefore, it may be very desirable that it should be possible quickly and clearly to exclude from the labour market as many juveniles as possible. I should think that certainly that will be the position at the end of the war. As nobody knows when that time will be, we should take every step now to leave the action of the House as free as possible. We do not divide on the principle to-night. We divide for the purpose of securing as great freedom as possible for the House of Commons, at the end of the war to deal with the matter on the merits of the case as they are then. All except two or three sentences of the Parliamentary Secretary's speech, when clearly he was carrying out orders, was


really directed towards securing that position. I sincerely hope that the Government will reconsider the decision announced by the Parliamentary Secretary, and will accept our Amendment.

8.17 p.m.

Mr. Mander: The Parliamentary Secretary said that it was essential that an opportunity should be afforded for the House to have a full-dress Debate or this matter after the war. One of the objects of this Amendment is to provide such a full-dress Debate. A great sacrifice is being made by hon. Members in agreeing, in time of crisis, to suspend this very moderate degree of advance in education. It might very well have been that hon. Members on this side might have said to the Government, "We will agree to this suspension provided that you, for your part, will agree to the exemptions being taken out when the war is over." That would have been a reasonable attitude, but the Opposition did not take up that attitude, and were much more accommodating. All they say—and I entirely associate myself with them—is that an opportunity should be afforded, directly the war is over, for dealing with the question of exemptions, and that if the House thinks fit, it shall decide that exemptions shall go. Of course, we realise that at that time the House might take the contrary view, but we say that, considering the great advances that were made in the last war in the way of constitutional reform, the franchise and education, which naturally arose out of the sacrifices of war, it in reasonable that, in the matter of education, we should contemplate a very much further extension of education at the end of the war than was actually contemplated in the 1936 Act. I hope that the Minister will think the matter over and consider whether it is not possible for him to accept an Amendment

on these lines. We want to obtain agreement on these matters and not to have divisions. I suggest that we should adjourn the Debate now—[HON. MEMBERS: "No"]—if the Parliamentary Secretary were to say that he would consider the matter further. At any rate, whatever may be the proper Parliamentary procedure in the circumstances, I hope the Parliamentary Secretary will facilitate the adoption of some Amendment of this kind which would, I think, be in accordance, with the wishes of all who are interested in education.

8.20 p.m.

Mr. Spens: May I respectfully suggest to the Committee that in this discussion we are tilting at windmills? Here we are debating the method by which we should deal with Amendments to the existing Act after the war is over. This Debate is proceeding on the basis that all the schools in the country and the whole educational machinery will be in a position to put the Act back into operation at the end of the war. That is an optimistic way of looking at the situation, and one in which, I hope, the Opposition is right. But the view I take is that when the war is over the Government of the day, whether it be the present Government or any other Government, will have to bring in a Measure to meet the circumstances of the educational situation as it then exists. That will not be done by bringing back the Act which we are now suspending. It will involve a much greater Measure. I hope, therefore, that the Parliamentary Secretary will leave matters as they are and leave it to the Government of the day, after the war is over, to bring in the proper Measure to deal with the situation which then obtains.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 81; Noes, 95.

8.30 p.m.

Mr. Lindsay: I beg to move, in page 2, line 12, after "incurred," to insert:
before the commencement of this Act by a local education authority.
They are words which appear in the Bill underlined, and I move their insertion.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, with an Amendment; as amended, considered; read the Third time, and passed, with an Amendment.

EDUCATION (EMERGENCY) (SCOTLAND) BILL [Lords.]

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 1.—(Suspension of operation of Section 14 of Education (Scotland) Act, 1918.) 8.32 p.m.

Mr. Pethick-Lawrence: I beg to move, in page 2, line 11, after "shall," to insert:
if the Secretary of State by order so determine.
I hope we may discuss this Amendment and the second Amendment on the Paper standing in my name together, but in the second Amendment there is a small modification in the last line but one, where the words "Secretary of State" should be substituted for the word "Minister." The second Amendment would then read, in page 2, line 17, at the end, to insert:
(2) Before any order is made under this Section, a draft thereof shall be laid before Parliament, and if each House resolves that the order, either with or without modification, be approved, the Secretary of State shall make the order in the terms of the draft so approved.


After what has already happened on the English Bill, I can explain these Amendments in a very few words. The object of the first is to give the Minister himself and the Government the power to resuscitate only such part of the original Act of 1936 as they may desire. The object of the second Amendment is to give the House of Commons the power to survey the proposal of the Government and to alter it if they think fit. The object, therefore, of these Amendments is to enable either the Government or the House, in resuscitating the original Act, to change it by resuscitating only certain Sections if that seems the better way to the Government or to the House at that time. The Parliamentary Secretary refused our Amendment on the English Bill, and, therefore, I am afraid that I have very little hope that the Scottish Secretary, in spite of his enlightened views and of the importance attached to education in Scotland, will take a different view from that of his English colleague. If he refuses to meet us, however, I am afraid we shall have to take a Division on this first Amendment as we had to do on the proposed Amendment to the English Bill.

8.35 p.m.

The Secretary of State for Scotland (Mr. Colville): I gratefully accept the tribute of enlightenment paid to me by the right hon. Gentleman, but I am sorry that I cannot meet his wishes. I must say, with the full responsibility which I have for education in Scotland, that I do not think it is the right way to attach to this Bill the provisions which the Amendment would seek to do. This Bill is to suspend the operation of the existing Act, and I think it should rest in that way. Whatever Government is in office after the war is over will have to consider the important question of education over a wide field. The action which we are taking would not preclude that from being done by whatever Government is in office then. Following the example of the right hon. Gentleman opposite, I will be brief; I contend that this Amendment is not the way to do it. I would have been willing, had the right hon. Member opposite agreed to move it, to accept an Amendment to secure discussion of this matter by ensuring that an Order should lie on the Table of the House, but I understand that that was

not acceptable by the party opposite in reference to the English Bill.

Mr. Pethick-Lawrence: I will make one pendant remark to what the right hon. Gentleman has just said. The only record that will appear in the OFFICIAL REPORT of the alleged Amendment to which the right hon. Gentleman has just referred will be what I say in referring to it, and perhaps it would be for our benefit if it could be read out.

Mr. Colville: I will read it out, because it is well that it should be recorded in the OFFICIAL REPORT. The Amendment which I suggested might have been moved would have been, in Clause 1, page 2, line 17, at the end, to insert:
(4) Before making an Order under Subsection (1) of this Section, the Secretary of State shall lay a draft thereof before Parliament, and if either House of Parliament, within the period of forty days beginning with the day on which any such draft is laid before it, resolves that the Order be not made, the Secretary of State shall not make the Order, but such a resolution shall not prejudice the making of any subsequent Order.
In reckoning any such period of forty days as aforesaid no account shall be taken of any time during which Parliament is dissolved or prorogued, or during which both Houses are adjourned for more than four days.

8.38 p.m.

Mr. Pethick-Lawrence: It is well that that has been put on record, and I will only say in regard to it that we rejected it because it does not in any way meet our desire. It does not give to the House of Commons of that day an opportunity of discussing the issue whether exemptions shall or shall not form part of the Act. All that it would give to the House would be the right to pass or reject an Order made by the Government, and not only would it give that right to this House, but it would give it to another place also, and, therefore, from our point of view, the acceptance of such an Amendment would have put us in a worse position than that in which we find ourselves now. It would not have given us the power to do what we want to do, but it would have given another place the power to reject the resuscitation of the Act in any form.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 79; Noes, 91.

Division No. 303.]
AYES.
[8.22 p.m.


Adams, D. (Consett)
Dobbie, W.
Harvey, T. E. (Eng. Univ's.)


Adamson, Jennie L. (Dartford)
Dunn, E. (Rother Valley)
Henderson, T. (Tradeston)


Alexander, Rt. Hon. A. V. (H'lsbr.)
Ede, J. C.
Hills, A. (Pontotraot)


Anderson, F. (Whitehaven)
Edwards, Sir C. (Bedwellty)
Hopkin, D.


Attlea, Rt. Hon. C. R.
Edwards, N. (Caerphilly)
Jagger, J.


Barr, J.
Frankel, D.
Jenkins, A. (Pontypool)


Batey, J.
Gallacher, W.
Jenkins, Sir W. (Neath)


Beaumont, H. (Batley)
Gardner, B. W.
Jackson, W. F.


Bevan, A.
Grenfell, D. R.
Kennedy, Rt. Hon. T.


Buchanan, G.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Kirkwood, D.


Burke, W. A.
Griffiths, G. A. (Hemsworth)
Lawson, J. J.


Collindridge, F.
Griffiths, J. (Llanelly)
Lee, F.


Daggar, G.
Hall, G. H. (Aberdare)
Leonard, W.


Dalton, H.
Hall, W. G. (Colne Valley)
Logan, D. G.




Lunn, W.
Price, M. P.
Taylor, R. J. (Morpeth)


McEntee, V. La. T.
Pritt, D. N.
Tinker, J. J.


McGovern, J.
Quibell, D. J. K.
Tomlinton, G.


Mainwaring, W. H.
Ridley, G.
Viant, S. P.


Mander, G. le M.
Riley, B.
Walkden, A. G.


Marshall, F.
Ritson, J.
Whiteley, W. (Blaydon)


Milner, Major J.
Robinson, W. A. (St. Helens)
Williams, E. J. (Ogmore)


Montague, F.
Sexton, T. M.
Williams, T. (Don Valley)


Noel-Baker, P. J.
Silverman, S. S.
Wilmot, John


Oliver, G. H.
Smith, E. (Stoke)
Windsor, W. (Hull, C.)


Paling, W.
Smith, Rt. Hon. H. B. Lees- (K'ly)
Woods, G. S. (Finsbury)


Parker, J.
Smith, T. (Normenton)



Pearson, A.
Stewart, W. J. (H'ght'n-le-Sp'ng)
TELLERS FOR THE AYES.—


Pethick-Lawrence, Rt. Hon. F. W.
Summerskill, Dr. Edith
Mr. Mathers and Mr. Adamson.




NOES.


Acland-Troyte, Lt.-Col. G. J.
Gledhill, G.
Radford, E. A.


Allen, Col. J. Sandeman (B'knhead)
Grimston, R. V.
Raikes, H. V. A. M.


Amery, Rt. Hon. L. C. M. S.
Hammersley, Captain S. S.
Reed, A. C. (Exeter)


Aske, Sir R. W.
Hannah, I. C.
Reed, Sir H. S. (Aylesbury)


Baldwin-Webb, Col. J.
Hannon, Sir P. J. H.
Reid, J. S. C. (Hillhead)


Balfour, Capt. H. H. (Isle of Tnanet)
Harbord, Sir A.
Rosbotham, Sir T.


Boulton, W. W.
Hepburn, P. G. T. Buchan-
Rowlands, G.


Brabner, R. A.
Hopworth, J.
Ruggles-Brise, Colonel Sir E. A.


Braithwaite, Major A. N. (Buokrose)
Holdsworth, H.
Sanderson, Sir F. B.


Brass, Sir W.
Horsbrugh, Florence
Shakespeare, G. H.


Briscoe, Capt. R. G.
Hunter, T.
Smiles, Lieut.-Colonel Sir W. D.


Brooke, H. (Lewisham, W.)
Jones, Sir G. W. H. (S'k N'w'gt'n)
Snadden, W. McN.


Browne, A. C. (Belfast, W.)
Kerr, Colonel C. I. (Mentrose)
Spens. w. P.


Butcher, H. W.
Keyes, Admiral of the Fleet Sir R.
Storey, S.


Campbell, Sir E. T.
Lamb, Sir J. Q.
Strickland, Captain W. F.


Cayzer, Sir C. W. (City of Chester)
Leech, Sir J. W.
Stuart, Rt. Hon. J. (Moray and Nairn)


Cazalet, Thelma (Islington, E.)
Leighton, Major B. E. P.
Sutcliffe, H.


Cobb, Captain E. C. (Preston)
Lindsay, K. M.
Thomas, J. P. L.


Colville, Rt. Hon. John
Lloyd, G. W.
Tufnell, Liout.-Commander R. L.


Craven-Ellis, W.
Loftus, P. C.
Ward, Lieut.-Col. Sir A. L. (Hull)


Crooke, Sir J. Smedley
MoCorquodale, M. S.
Ward, Irene M. B. (Wallsend)


Crookshank, Capt. Rt. Hon. H. F. C.
McKie, J. H.
Warrender, Sir V.


Davidson, Viscountess
Macmillan, H. (Stockton-on-Tees)
Wayland, Sir W. A


Da vies, C. (Montgomery)
Magnay, T.
Wells, Sir Sydney


Davies, Major Sir G. F. (Yeovil)
Makins, Brigadior-General Sir Ernest
Williams, C. (Torquay)


Donner, P. W.
Margesson, Capt. Rt. Hon. H. D. R.
Wilson, Lt.-Col. Sir A. T. (Hitchin)


Dugdale, Captain T. L.
Mayhew, Lt.-Col. J.
Womersley, Sir W. J.


Eastwood, J. F.
Medlicott, F.
Wright, Wing-Commander J. A. C.


Emery, J. F.
Molson, A. H. E.
Young, A. S. L. (Partick)


Entwistle, Sir C. F.
Moore, Lieut.-Col. Sir T. C. R.



Erskine-Hill, A. G.
Munro, P.
TELLERS FOR THE NOES.—


Fildes, Sir H.
Palmer, G. E. H.
Captain Waterhouse and Major


Gilmour, Lt.-Col. Rt. Hon. Sir J.
Pym, L. R.
Sir James Edmondson.

Division No. 304.]
AYES.
[8.39 p.m.


Adams, D. (Consett)
Harvey, T. E. (Eng. Univ's.)
Price, M. P.


Adamson, Jennie L. (Dartford)
Henderson, T. (Tradeston)
Pritt, D. N.


Adamson, W. M.
Hills, A. (Pontefract)
Quibell, D. J. K.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hopkin, D.
Ridley, G.


Barr, J.
Jackson, W. F.
Riley, B.


Batey, J.
J agger, J.
Ritson, J.


Beaumont, H. (Batley)
Jenkins, Sir W. (Neath)
Robinson, W. A. (St. Helens)


Bevan, A.
Kennedy, Rt. Hon. T.
Sexton. T. M,


Buchanan, G.
Kirkwood, D.
Silverman, S. S.


Burke, W. A.
Lawson, J. J.
Smith, E. (Stoke)


Coilindridge, F.
Lee, F.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Daggar, G.
Leonard, W.
Smith, T. (Normanton)


Dalton, H.
Logan, D. G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dobbie, W.
Lunn, W.
Summerskill, Dr. Edith


Dunn, E. (Rother Valley)
McEntee, V. La T.
Taylor, R. J. (Mcrpeth)


Ede, J. C.
McGovern, J.
Tinker, J. J.


Edwards, Sir C. (Bedwellty)
Mainwaring, W. H.
Tomlinson, G.


Edwards, N. (Caerphilly)
Mander, G. le M.
Viant, S. P.


Frankel, D.
Marshall, F.
Walkden, A. G.


Gallacher, W.
Milner, Major J.
Whiteley, W. (Blaydon)


Gardner, B. W.
Montague, F.
Williams, E. J. (Ogmore)


Grenfell, D. R.
Noel-Baker, P. J.
Williams, T. (Don Valley)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Oliver, G. H.
Wilmot, John


Griffiths, G. A. (Hemsworth)
Paling, W.
Windsor, W. (Hull, C.)


Griffiths, J. (Llanelly)
Parker, J.
Woods, G. S. (Finsbury)


Hall, G. H. (Aberdare)
Pearson, A.



Hall, W. G. (Colne Valley)
Pethick-Lawrence, Rt. Hon. F. W.
TELLERS FOR THE AYES.—




Mr. Mathers and Mr. Anderson.




NOES.


Acland-Troyte, Lt.-Gol. G. J.
Hammersley, Captain S. S.
Radford, E. A.


Allen, Col. J. Sandeman (B'knhead)
Hannah, I. C.
Raikes, H. V. A. M.


Amery, Rt. Hon. L. C. M. S.
Hannon, Sir P. J. H.
Reed, A. C. (Exeter)


Aske, Sir R. W.
Harbord, Sir A.
Reed, Sir H. S. (Aylesbury)


Baldwin-Webb, Col. J.
Hepburn P. G. T. Buchan-
Reid, J. S. C. (Hillhead)


Balfour, Capt. H. H. (Isle of Thanet)
Hepworth, J.
Rosbotham, Sir T.


Boulton, W. W.
Holdsworth, H.
Rowlands, G.


Brabner, R. A.
Horsbrugh, Florence
Ruggles-Brise, Colonel Sir E. A.


Braithwaite, Major A. N. (Buckrose)
Hunter, T.
Sanderson, Sir F. B.


Brass, Sir W.
Jones, Sir G. W. H. (S'k N'w'gt'n)
Shakespeare, G. H.


Brooke, H. (Lewisham, W.)
Kerr, Sir John Graham (Sco'sh Univs.)
Smiles, Lieut.-Colonel Sir W. D.


Browne, A. C. (Belfast, W.)
Keyes, Admiral of the Fleet Sir R.
Snadden, W. McN.


Butcher, H. W.
Lamb, Sir J. Q.
Spens. W. P.


Campbell, Sir E. T.
Leech, Sir J. W.
Storey, S.


Cayzer, Sir C. W. (City of Chester)
Leighton, Major B. E. P.
Strickland, Captain W. F.


Cobb, Captain E. C. (Preston)
Lindsay, K. M.
Stuart, Rt. Hon. J. (Moray and Nairn)


Colville, Rt. Hon. John
Lloyd, G. W.
Sutcliffe, H.


Craven-Ellis, W.
Lottus, P. C.
Tufnell, Lieut.-Commander R. L.


Crooke, Sir J. Smedley
McCorquodale, M. S.
Ward, Lieut.-Col. Sir A. L. (Hull)


Ctookshank, Capt. Rt. Hon. H. F. C.
McKie, J. H.
Ward, Irene M. B. (Wallsend)


Davidson, Viscountess
Magnay, T.
Warrender, Sir V.


Davies, C. (Montgomery)
Makins, Brigadier-General Sir Ernest
Waterhouse, Captain C.


Davies, Major Sir G. F. (Yeovil)
Margesson, Capt. Rt. Hon. H. D. R.
Wayland, Sir W. A.


Donner, P. W.
Mayhew, Lt.-Col. J.
Wells, Sir Sydney


Dugdale, Captain D. L.
Medlicott, F.
Williams, C. (Torquay)


Eastwood, J. F.
Molson, A. H. E.
Womersley, Sir W. J.


Emery, J. F.
Moore, Lleut.-Col. Sir T. C. R.
Wright, Wing-Commandar J. A. C.


Entwistle, Sir C. F.
Morgan, R. H. (Worcester, Stourbridge)
Young, A. S. L. (Partick)


Erskine-Hill, A. G.
Munro, P.



Gilmour, Lt.-Col. Rt. Hon. Sir J.
Palmer, G. E. H.
TELLERS FOR THE NOES.—


Gledhill, G.
Pym, L. R.
Mr. Grimston and Major Sir




James Edmonds on.

Amendment made: In page 2, line 18, insert:
before the commencment of this Act by an education authority."—[Mr. Colville.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Schedule agreed to.

Bill reported, with an Amendment; as amended, considered; read the Third time, and passed, with an Amendment.

COURTS (EMERGENCY POWERS) (SCOTLAND) BILL [Lords.]

Considered in Committee; reported, without Amendment; read the Third time, and passed, without Amendment.

AIR NAVIGATION ACTS.

Motion made, and Question proposed,
That an humble Address be presented to His Majesty, in pursuance of the provisions of Sub-section (3) of Section five of the Air Navigation Act, 1936, praying that the Air


Navigation (Licensing of Public Transport) Order, 1938 (Revocation), Order, 1939, be made in the terms of the draft laid before Parliament."—[Captain H. Balfour.]

8.50 p.m.

Mr. Montague: Before the question of the revocation of this Order is put to the House I should like the Under-Secretary of State to make one or two points clear. First, I confess that I hardly see what necessity there is to revoke an Order of this character. It may be that in present circumstances, when inland civil aviation will depend upon the permission of the Secretary of State, some technical difficulties may arise if this Order is not revoked, but I am concerned about another aspect of the question, in that the Order which is to be revoked and the subsequent administrative Orders contain some important provisions which vitally concern civil aviation inside this country. The Under-Secretary will know that important questions were debated by the House and certain decisions were taken to protect a number of interests. Civil aviation will not be put into cold storage for the whole of the war. I should hope, at any rate, that as we gain experience of what can be done in the way of maintaining the ordinary facilities of life while the war goes on there will be some resuscitation of internal air lines. As a matter of fact, I believe that in the case of Scotland and the Hebrides, if it has not been already decided that civil air lines are again to operate, the question is under consideration.
In the original Order of October, 1938, there were several provisions of importance and I will refer to three of them. There was the question of the relations between the companies licensed and the Postmaster-General regarding mails. That may not be of very great consequence, but two other points are. A company which is licensed under the Order has to make a monthly return, and also an annual report to be laid upon the Table of this House for discussion. If this Order is revoked, whatever is done by internal air-line companies will be done without any control at all by the House of Commons. Finally, there is the point, much more important to us on this side, that the Order established the Fair Wages Clause and certain other points regarding the treatment of the employes of companies which are licensed. All that goes by the board if this Order is revoked, and I think that if the Under-Secretary

will tell us what necessity there is for revoking the Order and will give us some assurance that the matters to which I have referred, especially as to the conditions of labour, will not be put on one side, the House will feel much more satisfied.

8.58 p.m.

Mr. Mander: I should like the Under-Secretary in his reply to deal with one or two points which are somewhat similar to those which the hon. Member for West Islington (Mr. Montague) has raised. It seems rather unnecessary to revoke this Order for the whole period of the war without knowing exactly what may happen. We thought, when this war started, that it would go on in accordance with precedent, and that all sorts of things would happen which usually happen, but up to the present it has taken a very different course, and various restrictions which were imposed have already been abandoned. In many ways life for many people is going on just as it did before, and I hope it will continue to do so. We are relying on the economic and financial weapon. It may be that a situation will arise in the future when it will be possible to operate in certain parts of the country, in the Western part or in Scotland, some internal air lines. In those circumstances it would be unfortunate if we had not these powers in operation. Perhaps the Under-Secretary will say something about that matter. I should like also to have an assurance on the question of fair wages, which is a very important one. It would be most regrettable if this provision were abandoned.
Perhaps the hon. and gallant Gentleman will also say what is to happen to the members of the board, who have, I presume, full-time jobs. Are they to be drafted to the Ministry of Information? In what part of the country and in what capacity are they to give their services? We ought to know whether they are to be seconded to other work with a view to going back to this work when the right time comes. These are the points which occur to me, and perhaps we may now have some information upon them.

8.57 p.m.

The Under-Secretary of State for Air (Captain Harold Balfour): I will endeavour to give the House some information on the points which have been put to me. In two mintues I shall endeavour


to explain the purpose of the Draft Order. It is a war measure which is intended to help to put an end to the system of licensing of internal air lines, which was established in 1938 by the Air Navigation (Licensing of Public Transport) Order, in pursuance of powers given by this House. The reasons why we ask the House to approve this revocation are twofold. At present, no civil aircraft may be flown on any internal route in the United Kingdom except under a licence granted by the licensing authority. Moreover, it is a condition of the granting of the licences that certain minimum services must be maintained.
Since the outbreak of the war, all civil flying in the United Kingdom has, for strategic and defence reasons, which hon. Members on all sides will appreciate, been prohibited except under special permit. Such services have to be kept under strict control as to time-tables and the conditions under which they operate, in order to fulfil the defence requirements, which unfortunately clash with the ordinary commercial requirements which the licensing authority impose. It is unnecessary, and it would be inconvenient, that the requirement of air transport licences should continue and that the licensing authority should be kept up at the public expense. Those are the broad reasons why we ask the House to assent to the Order.
The hon. Member for West Islington (Mr. Montague) asked me three questions. One was about the mails, and the re-Lations with the Post Office in relation to the carrying of the mails. In any civil and internal air lines which may be permitted during the war, the carrying of mails will have to be the subject of special arrangements between the Air Ministry and the Post Office, as to the conditions under which those mails can be carried for the convenience of the Post Office, and the conditions which we have to impose in view of defence requirements.
The second point of the hon. Member was about the annual report which the licensing authority has to render to this House. The authority had intended to render that report up to the end of October this year. Unfortunately for the licensing authority, but fortunately for the country, two members of the licensing body, and the secretary, have been called

up for war service. Therefore we cannot expect a report to be rendered. Nevertheless, ample records and minute books have been kept, and these will be available when the day comes, as we all hope it will, when civil aviation can be restarted in this country.
The third point which the hon. Member asked me—and it was also referred to by the hon. Member for East Wolverhampton (Mr. Mander)—was the question of the Fair Wages Clause. I can give this assurance. In any internal lines which we can run in this country—and we wish to allow such lines to run as can be permitted, having regard to defence requirements and equipment available, when the needs of the Air Force for communication purposes have been satisfied —the financial arrangements will have to be under the close control of the Air Ministiy, and we shall insist on the Fair Wages Clause to no less a degree than would be required by the licensing authority.

Mr. Montague: Would it be possible, if any internal air line is authorised by the Secretary of State, for us to have the details before the House for question and discussion?

Captain Balfour: Let us assume that we assented to an air line going over a piece of the ocean; we might have to impose very strict limitations as to what conditions that service was run under; its frequency and what sort of loads it carried. These are matters which, the hon. Member will appreciate, it might not be in the public interest to state. It might be commercially stupid, but, unfortunately, it would be necessary in the interests of defence. But I will give the assurance that the financial arrangements shall safeguard the interests of those who are engaged in any form of internal air lines in the same way as they have been safeguarded under the licensing authority.

Mr. Mander: What is going to happen to the members of the licensing board?

Captain Balfour: I said that two members and the secretary of the board are now serving their country in other spheres of activity.

Question put, and agreed to.

Resolved:
That an humble Address be presented to His Majesty, in pursuance of the provisions of Sub-section (3) of Section five of the Air


Navigation Act, 1936, praying that the Air Navigation (Licensing of Public Transport) Order, 1938 (Revocation), Order, 1939, be made in the terms of the draft laid before Parliament.

To be presented by Privy Councillors or Members of His Majesty's Household.

COAL RATIONING.

Motion made, and Question proposed, "That this House do now adjourn."— [Major Sir J. Edmondson.]

9.3 p.m.

Mr. Batey: This afternoon I put a question to the Secretary for Mines as to why coal should be rationed. His answer was so very unsatisfactory that I am glad that we have an opportunity of debating the matter now. Fortunately, we have the opportunity of a full Debate, and we have plenty of time. There are a good many other Members on this side of the House who feel as strongly on this question as I do myself. We believe that this fuel Order is bad, and that there is no justification for rationing coal. Since the war a great deal of legislation has been passed and a great many Orders have been made. The House may not have paid the attention that it should have done to some of the Orders. This is an Order to which more attention should have been paid, and I am convinced that the sooner we can get rid of it the better it will be for the country. It might have been wise to pass legislation with the intention of putting the Order into force after the war had been on for some time, but, instead of waiting, the Secretary for Mines put the Order into force immediately. That seems to me one of the silliest things any Minister could have done. To prevent people getting all the coal they want now seems to me a very stupid thing.
I was surprised when the Minister of Labour said last Thursday that on nth September, the last day for which unemployment figures were available, there were no fewer than 49,588 unemployed miners in England, 9,687 unemployed miners in Scotland, and 17,292 in Wales, making a total of 76,567. That is an immense number of miners to be unemployed at a time when the Government are preventing people from buying coal. There was in this House not long ago a Debate in which one of the Ministers

urged that more ladies' hats should be bought. If the Secretary for Mines had been active in the interests of the miners, he would have bene urging that more coal should be used in order to find employment for the unemployed miners, but instead he has taken a step to prevent people from buying coal, thus leaving these men unemployed. But that is not all the story. There were 76,567 miners unemployed, but it would be interesting to know how many more thousands of miners have been temporarily made idle during the last week or two. In the County of Durham we have had 14 of our largest collieries standing idle for more than a week. There is no demand for coal, and therefore these men have to be added to the huge number of men who are unemployed at the present time.
The answer of the Minister to-day was not sufficient. He simply said that they were doing it because of the risk of dislocation of coal transport and distribution facilities. That is difficult to understand. The Government must take some risks, and there would have been no risk in not putting the Order into force, and thereby allowing people to get as much coal as possible at the present time. It is difficult for one to imagine that the time should ever come when coal could not be carried on the railways. That never occurred during the last war, and it is difficult to understand that it can occur during the present war. But if it should not be possible to carry coal by rail from the North of England to the South, there is always the coastwise traffic. There has always been a lot of coal carried down the coast to the South of England, and it is no answer for the Minister to say that there would be risk and danger in carrying coal. That does not justify the Minister in the action he has taken in putting this Order so quickly into force.
We are told that we are at war in order to fight Hitlerism. The trouble is that, while we are at war fighting Hitlerism, we have set up in this country an immense number of little Hitlers who are making it as difficult as possible for the people of this country, and seem to take a delight in oppressing the people. This is one of the things which the people in this country do not like. Why punish them by making it more difficult for them when there is no real necessity to do it? When the Finance Bill was being debated one hon.
Member talked about the home front being the most important front. If the home front is the most important, then in my opinion we should keep the people in this country contented as long as we possibly can. It is not a wise thing to put an Order like this into force when there is no need. If there was any need we would agree, but when there is no need we say the Order should not be put into force. It seems a strange thing to me that when any section of the community has to suffer it is the mining community that comes first. They have been suffering ever since the last war. We have had an immense number of men who have been unable to get employment and now, when there is a chance not only of getting some of them back into employment and of keeping pits going every day that are working now, but of getting other pits open that have been closed for years, the view of the Government seems to be that it will be just a pleasant thing to let the unemployed miners go on suffering. Unless the Minister will agree to take steps to delay putting this Order into force or cancelling it altogether we shall have to take steps to fight this Order at every opportunity.

9.12 p.m.

Mr. Ritson: I want to support my hon. Friend in what he has said, and to add that it is not only a question of rationing coal but of rationing electricity which is generated by coal. I come from the East Coast and I came across a man who is employed at a colliery where I was checkweighman for many years. I asked how many days a week the colliery was working, and he said, "Two." That colliery produces the finest gas coal, and yet people in that very town are being told that they will have to do with less gas and less electricity while the men at the colliery are working only two days a week. People are getting alarmed not only about the rationing of coal but the rationing of lighting. There is nothing more depressing on God's earth than to go through this city in the dark. We have been brought up in the dark in the mines but we do not expect darkness in cities like this. Not only are they trying to put out the light of heaven but to prevent us from having either light or heat. I know there are other hon. Members in this House who will have a word to say about coking coal. Why should

these pits be left idle? The Miners' Federation and the Ministry of Mines have been getting together to try to bring about greater output, and I understand a guarantee is wanted of 10 per cent. more coal. Yet it is proposed to restrict the use of coal.
I cannot understand the Minister at all. I do not know who his advisers are, but he should get rid of them. I can assure the Secretary for Mines that it would be cheaper to keep the men at work rather than to pay unemployment benefit and to keep the men idle when they want to work. If we want to maintain the moral of the people we should give them light. I have always said that light is better than ventilation in some dark places, but it is still more valuable when it contributes towards the cheerfulness of the home. Here is a vast amount of coal and a magnificent number of men who are willing and anxious to raise it. There are collieries where 6,000 tons a day can be raised, and others where 3,000 tons can be mined. Then the Ministry say, "What do we care?" If there is anything ridiculous, I think it is the Order which has been given. In July we lost 122,000 tons as against the preceding months. If the Government are frightened of anything, why not stock thousands of tons of coal so that in an emergency there will be enough to go on with? It is not only in the interests of the men but of the country as a whole. The miners are the only people who have not had the oppor-tunity of earning their bread by the sweat of their brow.

9.17 p.m.

Sir William Wayland: One of the most inexplicable things which the public has had to face is the rationing of coal. The only excuse that I can see is that of transport. To-day I was talking to a gentleman connected with the gas industry, and he said, "What are we to do? The Government are rationing coal, and at the same time they are urging us to produce as many by-products as we possibly can for war purposes." That seems an extraordinary thing to me. I have heard people ask, "Why are we rationed? Have we not enough coal in the country? I thought we had plenty. "My reply has been, "The last statistics that I saw showed that we had sufficient for 200 years ahead, so I think we have enough to be going on with."
I cannot conceive of any excuse which the Ministry can make as a solution of the puzzle which they have put to the people. When hon. Members opposite speak of miners being unemployed and tell us that only 75 per cent. of the coal raised last year has been permitted to be raised, it seems most extraordinary to me. I might call it by a much stronger term which, perhaps, would not be permitted in this House. [HON. MEMBERS: "Try it."] I should say it is damned foolish. All it will do will be to put more men out of jobs, increase the staff of the Mines Office, irritate the public and not do any good for our war purposes. Therefore, I hope that common sense will prevail and that the rationing of coal will be dropped like a hot poker.

Mr. Deputy-Speaker (Colonel Clifton Brown): I hope that other hon. Members who take part in the Debate will not follow the example of the hon. Member for Canterbury (Sir W. Wayland).

9.20 p.m.

Major Milner: I put down a question in almost identical terms to that of the hon. Member for Spennymoor (Mr. Batey), and the Secretary for Mines replied to my question in the same terms as he did to my hon. Friend. I am glad the hon. Member has raised this question on the Adjournment, because I agree that it is rank absurdity to have brought such an Order into force. We asked what were the reasons for reducing the production of coal having regard to the ample supplies of coal available? The Secretary for Mines did not give, as he might have done, a number of reasons, but he said that one of the main reasons was the risk of dislocating the transport facilities. I presume he meant that there was a serious risk of air raids the moment war began. To cover that risk the production of coal has been reduced by 25 per cent. If the risk was so great, why not have made it 100 per cent.? In my submission this Order, like so many of the other steps taken by the Government, has created the maximum of inconvenience with the minimum of practical results. It is the opinion of most people that, while in the first instance it may have been right to take all these various air-raid precautions, the moment it was seen that we were not likely to have an immediate air attack then all these steps, including the

rationing of coal, should have been modified. There was ample time to bring them into force if the necessity arose.
It was quite unnecessary for the Secretary for Mines to take this step. In doing so he has entirely disregarded the fact that there are 100,000 miners out of work who have had a very bad time for many years, who could now be found work in the mines of the country. I have miners in my own constituency, and I know that it is a matter of complaint among them that at this juncture when they might have been of service to the country with their knowledge of mining, and when they might have been employed under more satisfactory and remunerative conditions, the Secretary for Mines has deprived them of that opportunity. But also the consumers are taking great exception to the Order. There, again, one would have thought that if the Government had not had the wind up, as they have for the last few weeks, they would have had the interests of the public at heart and given serious consideration to this matter; and that they would have allowed the consumers, and particularly householders, to stock up as much coal as they could afford and then when the emergency arose they would have had available stock which would carry them through the emergency. But no; as soon as the declaration of war is made the hon. Member deprives them of that opportunity. There may come a time when it will be impossible, by reason of air raids, and so on, for consumers to have coal at all. Therefore, would if not be the wisest thing for the Government to do away with these restrictions and enable all those who require coal to stock up as best they can, and if and when an emergency occurs, restrictions can be imposed?
There is another matter which I regard as a very serious factor in this question. Coal is largely used for the production of coal gas and, during war time in particular, a very large quantity indeed, of by-products is required for the making of munitions. In Leeds, from something like 250,000 tons of coal used for gas production last year, there emerged as byproducts nearly 600,000 gallons of crude benzol, 14,000 tons of tar, together with large quantities of ammonia and other valuable chemicals. Does it not seem the height of absurdity that at the commencement of a war, when one would have


thought all our efforts ought to be directed to producing articles required in the production of munitions, the hon. Gentleman should have brought in an order the very first result of which is to cut down the possible products of coal in the form of benzol, tar, phenol, toluol and other constituents of high explosives. It seems almost a crime that he should have (bought for a moment of doing that. I asked the Minister of Supply yesterday whether that matter had been borne in mind, and whether he had consulted those who can advise on these matters as to whether the restriction of the consumption of coal, and hence the production of gas, would not adversely affect the supply of by-products. He said the matter had been receiving consideration. He did not think that up to date the restriction had had any serious effect but he was aware of the opinions referred to and was in touch with the interests concerned. He did not answer as to what consultations he had had on the subject, nor have I so far heard whether, before he made this restrictive Order, he had any consultation with anyone as to whether it would not very adversely affect the production of by-products essential to the manufacture of munitions.
This appears to be an extremely serious matter. It affects the employment of a vital part of the community, it affects, in one of the necessities of life, the whole community, who, of course, directly or indirectly are consumers of coal, it affects vitally the production of by-products essential to the making of munitions, and the hon. Gentleman has a very serious case to answer. I believe that he would be well advised now to say he appreciates that perhaps the Ministry have been a little hasty; that, having regard to the circumstances which at present exist, the Order might be modified and 100 per cent. production, or more if possible, be restored, and that only if and when an emergency arises and the production of the fullest amount of coal is not possible, will he think of further restricting the production of that commodity. I think the House and the country will be grateful to my hon. Friend for raising this question to-night.

9.31 p.m.

Colonel Baldwin-Webb: I strongly support the plea, which has been so eloquently put forward from both sides of the House, that this Order should be

modified. Surely, at this time we should encourage the complete employment of all men engaged in producing this essential commodity. I happen to represent a constituency in which there are miners, and I realise the gallant work which they do. They should be encouraged as much as possible. This bureaucratic ramp affects not only this particular industry, but it affects our lives in many other ways, and the country is definitely dissatisfied with this control and this regulation. We want increased production from every source. For example, in regard to foodstuffs, it is not regulation that we want, but 100 per cent. production. That can be brought about if there is encouragement from various Departments. As a result of experience which I have gained during the last few weeks, I warn the Minister that action should be taken now in this matter, as in others, and that if action is not taken, the country will be even more dissatisfied.

9.32 p.m.

Mr. George Griffiths: I am pleased that my hon. Friend the Member for Spenny-moor (Mr. Batey) has given us an opportunity of voicing not only our own opinions, but the opinions of the people whom we represent. The people in my division cannot understand why this Order is being put into operation. In my division there are hundreds of miners out of work, and they have been out of work for months and months. When these men saw that we had declared war on Germany and that Germany had declared war on Poland, they said, "There will be a chance now for some of us to get back into the pits." I see that the Minister nods his head, but these men are not back yet, and there is no sign of their getting back. They want to know why this Order is being put into operation.
There is another point I want to put to the Minister. I am afraid that the Government have "got the wind up" and that they have been thinking that output will be decreased instead of increased. That happened during the last war, but why did it happen then? It was because thousands of miners volunteered and went into the Army straight away. Some of the lads from my village were fetched out of the trenches in France and brought back to produce coal, because they were of more value in producing coal than they were in France. That sort of thing will not happen during this


war, because at the present time mining is a reserved occupation. Our men cannot go. Incidentally, one hon. Member said that his constituency was dead set against the war. I cannot say that of my constituency. If there had not been conscription, many pits in my division would have been short of men, because the men wanted to volunteer for the war.
I cannot see why the Secretary for Mines should put this Order into operation. I want to draw the attention of the Minister to another matter. Two and a half years ago the president of the mine workers in Yorkshire stated that the output capacity of the mines of Great Britain was 330,000,000 tons per annum. With mechanical inventions and the extension of the use of the coal-cutter, the output should be greater now than it was two and a half years ago. The Minister is asking for a 10 per cent. increase. The production last year was, I think, about 225,000,000 tons and he is asking for 260,000,000 tons. Some of these chaps, in Abertillery and in other divisions, have been drawing unemployment pay for 10 years. Now they have a chance or should have a chance of earning wages up to £3 10s. or £4 a week instead of drawing unemployment benefit up to 34s. a week. They cannot understand the mentality of the Government as shown in this Order. Why is it applied at a time when coal is more needed than at any other time—in the winter months? People are to be allowed to have two tons a year, in certain circumstances.

The Secretary for Mines (Mr. Geoffrey Lloyd): There are two tons which are free of rationing. The rationing does not begin until after the two tons.

Mr. Griffiths: And then they are to get three-quarters over and above that. The Order stipulates that there should be two tons in a year without rationing. Then they have to start rationing. I am pleased to hear what the Minister has said because it is being circulated that people can only have the two tons. That is the impression.

Mr. Lloyd: It is important that that impression should be corrected. It is very difficult in these times, when so many announcements are being made, but we have done our best to make it clear that the two tons is the amount

which is free of rationing and that rationing only begins after the two tons per year.

Mr. Griffiths: They get two tons without rationing and 75 per cent. over and above that. The Government, however, are not only rationing coal but also gas and electricity, two very important things in the home, and it means, in effect, not 75 per cent. but something less. My hon. Friend the Member for Spennymoor (Mr. Batey) said there were 76,000 miners whole-time unemployed but how many are under-employed? The pit in which I worked before I came here has not worked full time since 1926. My hon. Friend the Member for Durham (Mr. Ritson) spoke of a colliery which he knew. I had a letter only this week from a Salvation Army officer stating that the men at a pit in the district where he was living drew only two days wages last week. These men want to know why, when they can get only part-time work, the Government should introduce rationing. They ask that they should be given a chance. I think the Minister has been, I will not say frightened but has been influenced by looking back to the last war and noticing how the miners volunteered more than any other set of men. The fact that the miners over-volunteered in the last war has frightened the Mines Department. We ask that this Order if not withdrawn entirely should be modified so that people can get a chance to work, instead of being on unemployment pay.

9.40 p.m.

Mr. E. J. Williams: I want the Minister to believe that the statements that have been made by my hon. Friends and by an hon. Member opposite correctly represents what is troubling the country. I have had a large number of people, not miners either, who have asked the reason why coal should be rationed. They can understand why certain foodstuffs should be rationed. They can understand that we depend largely on the importation of certain commodities, particularly on the immediate declaration of war, in that a large number of transport vehicles would have been appropriated, but they cannot understand why this Order should have come in on 3rd October and should apply indefinitely, at a time when the Minister himself is making representations to the


Mining Association and to the Miners Federation of Great Britain to increase the annual output of coal to 270,000,000 tens, which I understand is the figure that has been stated loosely to the representative associations. It is quite certain that we shall require to increase our export trade substantially in order to obtain in exchange for that a large amount of oar foodstuffs in the future, and the public can understand certain measures being taken in order to increase our annual output for such a purpose, but they cannot understand why any restriction should be placed upon the people, particularly when we are facing winter, when they need a larger quantity of coal in order to have something like adequate comfort in the home.
I think the Minister should face up to this problem precisely as the Minister of Food did. In the fish muddle the Minister realised that he had to go back to normality, and I think the Minister for Mines will have to do precisely the same before he will satisfy the public of this country. One can well understand that when war was declared certain things were expected, such as that food stores should be placed in the least vulnerable areas, and that kind of thing, and that may have caused a certain amount of chaos for some weeks. That may appertain to meat, but we are in that respect largely dependent upon importations, while we are not dependent upon importations of coal. We have the men, the personnel, to hand and we have, obviously, enormous quantities of coal that can be worked quite easily and readily whenever the Minister requires it. It is, therefore, difficult to understand how the Minister could have come to the conclusion at which he has come. It is true that at the commencement of the last war proportionately a larger number of men left the mines than any other industry, but it has been known for some months practically that mining would be a reserved occupation, and that miners were not brought within the confines of the first Military Training Act, so that that could not have been the reason for advancing a measure of this kind.
If it is a question of transport facilities, so far as my constituency is concerned, we have quite a number of one-man businesses which have been completely dislocated. If a lorry was a good

one and it was commandeered, and the man's trade was affected, there was someone else in the district who could at once have taken his trade, who could have taken the goodwill of his business and supplied the normal quantities that were required, particularly by the householder. From whatever angle the public have endeavoured to analyse the reason for this rationing, they find greater confusion. The public will not be satisfied with any restriction in the consumption of coal, particularly in households, until some significant reasons have been advanced. It must be assumed that it is essential for the prosecution of the war, but that at the moment cannot be advanced. Why there should be need for restriction at the very moment when the Minister is asking for increased output and has the good will of the industry passes comprehension.

9.46 p.m.

Mr. Mander: I have in my constituency a number of miners, most of whom work in Hilton Main Colliery, South Staffordshire. I have never been permitted to go down that mine and the miners always tell me that I shall never be permitted to go down. I do not know what is the reason. They are naturally much interested and concerned in the plans of the Government for rationing coal. All the consumers are concerned, too, at being put to what may prove to be entirely unnecessary work in filling up the registration forms. I am sure the Minister welcomes the opportunity of being able to make an attempt to justify the steps he has been taking. Is there a shortage of men? Are the men wanted for something else? Is the idea of the Government that they should be taken from the coal mines to work in munition factories? What is the plan? I hope there is some plan. One hon. Member said he did not blame the Minister, but that the people who advised him were to blame. That is all wrong, for the Minister is the only person we can blame and he is responsible for anything done by the people from whom he takes advice.
It is suggested that the Government are setting up all sorts of Hitlerite institutions in various Departments. I am sure that the Minister would be the mildest of such a type if it were true, but I cannot help thinking that if the Government go on on their present lines in conducting the war we may end up


with the Prime Minister as Stalin and the Chancellor of the Exchequer as Hitler. Whether hon. Members would think there was any improvement on the present occupants would depend on the views they held. I urge upon the Minister to take every possible step to allow the output of coal to be increased; there are many willing workers to do it and there are people who need the coal, partly for warming themselves during the winter and partly for manufacturing and for essential war work. There are many consumers who would be glad to be relieved of some of the new clerical work which has been imposed on them during the past four or five weeks by the necessities of the situation.

9.49 p.m.

Mr. Logan: I trust that the Minister will withhold this Order. I am not speaking from the miners' point of view, because I have no connection with mines, but I am aware, after the many years I have been in Liverpool, of what the poverty of the people means and what the lack of a fire means. In the homes of the poor, where there are big families, food is an important matter, and with the cost of food rising it is all the more imperative for the people to have some heat, because to them a good fire is food as well as heat. It is absurd that there should be a restriction upon a commodity which is produced here in plenty, and that a body of men should be unemployed simply because the Ministry bring in an Order which in my opinion is a ridiculous one. Never before during my lifetime have I heard any such proposal put forward before. I am at a loss to understand why men are not employed when they could be employed, when we have the coal, and when the employment of these men would bring so much relief to places that have been so badly hit.
It is not only a question of unemployment among the miners. Curtailment of the production of coal will throw other large bodies of men out of work. Some of the men employed in our electricity undertakings and gas works will not be required. I am not able to take the pessimistic view that we need worry about this war. I am not concerned about that side of it at all, but I am concerned about the black nights, walking through the dark and the lack of light in the homes. It is

essential if it is dark outside, that inside everything should be light and bright. The people round the fireside ought to be able to realise that the world is not as dark as it may appear. The psychological effect will be very valuable. Psychology-plays a great part to-day, and if our people have warm fires they will be comfortable at home and will keep light-hearted even though the blinds are drawn. In the homes in my city when the blinds are down it means a death, and we ought not to have the death feeling about us. We ought to have the feeling of life, and all that is necessary is to put new life in the Minister, and persuade him to revoke this Order and bring brightness into the homes of the people.

9.53 p.m.

Mr. Collindridge: We must all agree that this discussion has been fully justified. Three definite interests have been put forward in the speeches made this evening—the national interest, the interest of the coal consumers and the interest of the mining industry and the miners. There is no need for me to stress the national interest. We on these benches who represent mining constituencies remember how, in the later stages of the Great War, the then Prime Minister, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), appealed to the miners to produce lumps of coal and to allow those lumps of coal to be flung to the Germans in the shape of shells. We all know that the national interest is served in that way. We also plead for our mining districts, which have been so long benighted under the strain of unemployment that some of them are classed with the legions of the lost. While we deprecate that a war must come about in order to allow these people to get back to employment, I should think the nation would be glad to see them in employment again helping the national effort, and, incidentally, to know that people who had rather lost hope have found it again in new work.
I want to put forward a practical suggestion, because I think there is a way out of this difficulty. We have many miners unemployed or, as in my own division, working on short time. Half a mile from where I reside are two large mines, where 2,000 workmen were off work for two days last week. There is an old saying that a mill will not grind with waters


that are past; the time that has been lost in the non-production of coal because miners have been idle can never be recovered. We shall miss that coal. My practical suggestion is a simple one. When industrial disputes have been pending in the mining industry the mineowners have, in times past, quietly, before the industrial strike came about, stocking large amounts of coal. In 1912 there was a mining dispute, and one of the greatest collieries in South Yorkshire stocked, prior to the dispute, 50,000 tons of coal on the pit-top. The colliery sold that coal to a large shipping company, with very great financial advantage. If that can be done during a time of industrial strife, it can be done when we are waging war against the enemy at the gate. In these days, when miners have been off work, we could have had coal produced and laid on the pit-top in readiness for when we wanted it. In view of the scarcity which we shall probably experience, and which we experienced in the last war, there may have to be local committees of mineowners and miners discussing such questions as absenteeism among the miners. You will have the tragedy of time being lost at the commencement of the war on that account.
There is the further point that, dependent as we are for much of our petrol supply upon outside sources, we should have been having coal stocked, and re-search going on apace, with the idea of making ourselves more independent in regard to our necessary fuel supplies. I ask the Minister to consider this question from the point of view also of the loyalty of the people in our mining localities. It seems incongruous that we should have fit men in their early fifties or forties unemployed at the present time, although they are wishful to help, not only in the interests of their families, but in the interests of the nation, to prosecute the war.

9.59 p.m.

Mr. Tinker: Having got the miners' leaders and mineowners together for the purpose of reviewing the whole question, in order to see what were the possibilities of the mining industry, it was unfortunate that this restriction was put into force before that review was completed. We should allow people to have the same amount of coal that they had before, until we had found out how much coal we could get when all mines were worked.

In the peak year 1914, we were able to produce 282,000,000 tons. It is now stated that we have a potential capacity of over 300,000,000 tons. It is recognised by all mining experts that it can be done in a short time, but it is also well known in every mining part of the country that there are vast numbers of unemployed men who are only too eager to get back to work. It has been pointed out, also, that short time is being worked at many of the collieries and that many mines have been closed down which could readily be reopened.
I want to urge upon the Minister a point which will show what can happen in the mining industry. Owing to the coal quota, one mining syndicate bought another colliery out, and to prevent it being reopened quickly they deliberately blew the access shaft in. That has happened in the last 12 months. It is a crime against the country. Whatever the Minister may have had in mind when he brought in the Order, would he take it from me that the mining industry can always produce all the coal he wants? I have been repeatedly asked in the mining areas why coal has been rationed, and I have assured people that the restriction can only be temporary. I have said this in excuse of the Minister—and of myself, because I was taken by surprise—"Probably he is looking around in order to find out the position, and I can assure you that you will have all the coal you want before long." I hope the Minister will be able to tell us that he will accept our assurances, and be moved by the arguments put forward by men who understand the industry. The Minister of Food acted recently in response to arguments advanced in this House because he found that those arguments were sound. We can give the Secretary for Mines an assurance that we can produce 280,000,000 or 300,000,000 tons per annum without any difficulty. I hope that he will tell us that he is satisfied that the restrictions need not be applied and can be removed in a very short time.

10.3 p.m.

Mr. David Adams: I should not have intervened in this Debate, especially at this late hour, but, by a coincidence, I received this morning a letter, bearing yesterday's date, on this very question. It is from the secretary of the Hedley Pit lodge, South Moor, Stanley, Co. Durham, and says:


I am instructed by the members of the above-named lodge to ask you to get in touch with the Minister for Mines to see why there is so much lost time in the coal mines of our group of collieries, namely, Craghead, Holm-side and South Moor Coal Company, when there is such a demand for the coal, and also urging a return to the mines of all capable of carrying out such work. Over and above that, there are men being released from His Majesty's Forces to go back to the mines.
It seems to me that one is justified in saying that no sound reasons have been advanced for this wasteful and highly costly scheme of rationing. Certain of our manufacturers, and the Government themselves in certain respects, are being rationed under this Order. I know from experience that this Order is being strongly resented by consumers. Constituents of mine declare that they normally consume far too small quantities of coal and that it would be beneficial to family life if larger quantities could be consumed. While many of them are not affected directly by the Order, there are people just above the scale who are affected by it. No doubt every Member of this House has seen how the gas companies of the country are in revolt against this Order. Circulars have been sent out, and I have taken the trouble to interview some of the leading gas companies in the North of England and have been assured by them that this will be a burden which will be thrust upon the consumers. One company advised me that the cost of this Order will not be less than £42,000 and that the sooner it is suspended the better. As the price of gas to the consumer was based upon a sliding scale in which certain profits arose, and the quantity of gas was diminishing, the consumers would have to pay under this unnecessary scheme of rationing.
I was assured, and probably the House has seen the figures, that there will be a diminution through the Order of from 20 per cent. to 38 per cent. of coke, motor benzol, toluol, and naphtha. Some of these are the constituents of high explosives, and therefore the Government themselves have been rationed in conducting this war, as a result of this Order. The diminution in the production of essential oils that we require means an additional strain on our tanker tonnage without any justification. The colliery companies are in revolt because there are unemployed miners, and the colliery districts are certain to be called upon to pay

heavier rates owing to unemployment. The loss to our local authorities owing to 100,000 miners being out of work will be accentuated by this Order of the Government.
I have not heard a single argument advanced during my peregrinations in favour of the Order. The only excuse I heard advanced was that we are living in a rationing age, and the Secretary for Mines has been affected by this unfortunate virus. It appears to be so from the answer he gave this afternoon to my hon. Friend's question. A reason put forward was the risk of dislocation of coal transport. Everyone who knows anything about colliery working knows that when there is a shortage of transport, a shortage of wagons, a colliery is laid off for a day or two. It works automatically. It did not want a rationing Order which is costing the State many thousands of pounds, and causing irritation to the whole consuming public—some 30 or 40 million people are affected by it—to tell a colliery owner not to produce coal because there would be dislocation of transport. The fact is that there was never a need for this rationing. The Secretary for Mines is one of the pleasantest of all Ministers, and is always able to justify any course which he has pursued, but I shall be amazed if he can to-night justify this Order, and I shall be still more amazed if he does not undertake to withdraw it.

10.12 p.m.

Mr. Lawson: I think the House will realise that it must be a serious matter which can keep us sitting at this hour, and will realise that we on this side have no desire to keep the House longer than is necessary, but this really is a serious matter. The reply given by the Minister may be that so far as he is concerned the policy has been laid down and cannot be changed until there is a Cabinet decision, but I see no reason why the hon. Gentleman, in the light of the arguments which have been put forward, should not assure the House that the carrying out of the Order will be postponed. He must see that it is going to make very great hardship in the country generally. This is not merely a miners question but a question affecting the whole community.
There are masses of poor people who can consume only a very small amount of coal, but even so two tons will not get


them through the winter. They are going to be very hardly hit in that way apart from the question of light. It seems to me that the argument about dislocation of traffic is no answer at all to the arguments which have been put forward. In the last war, as far as I remember, there was no rationing of coal although there was a German Navy. This time we have swept the seas and there is no German Navy, but yet we are rationed. In the last war most of the French pits were in the hands of the Germans and we needed to supply the French people with coal. I believe we also had to supply the Italians, because Italy then did not use water resources to the extent that she does now. They did not electrify to the extent that they do now; they used more coal. There was a great demand for supplying our allied nations and yet there was no rationing. The need, certainly, is not as great, and the situation is not as bad to-day as it was in the last war, and I do not know why it has been thought necessary to ration coal.
As to the suggestion that railways might be dislocated, it would make no difference, whether there is a lot of coal or a little coal, if people were limited to three-quarters of the amount which they had last year. That will not improve the position unless we are going to pile up the coal in various parts of the country, and that is not being done. We could do that now instead of keeping men idle. I am waiting to hear what the Minister will say, and I am very much astonished that there has been no simple explanation given on a matter of this description.

Mr. Lloyd: There has been.

Mr. Lawson: The hon. Gentleman says there has been, but I do not think that is so.

Mr. Lloyd: We have made attempts to do so publicly, but the hon. Gentleman will realise that there have been announcements from so many sources and so much news since the war started that people do not pay as much attention as they would in peace time. That is the difficulty.

Mr. Lawson: I shall be glad to hear any reply that the hon. Gentleman has to make to the House on this matter. If he is not going to set this Order aside temporarily, he must take this message back to the Cabinet or to those who are

more responsible than he, that we are not going to have this rationing Order in the present state of the needs of the country.

10.17 P.m.

Mr. Lloyd: I am glad of this opportunity to-night to say a little more than I have had the opportunity of saying before about this important subject of coal, gas and electricity rationing. I agree and very much sympathise with the view that has been expressed by many hon. Members, that it seems at first sight inexplicable that we should have rationing in this country where we have so many coal mines and where coal is one of our great and famed national resources. It is, therefore, only too natural that people should ask, not only in this House but outside, why we should have rationing when it is believed that we have plenty of coal in England.
I would like to interpose a word here, because I think it is a suitable moment, about the rationing scheme itself before I come to the reasons for it. Granted the necessity for a scheme of rationing coal, gas and electricity, the Government have endeavoured to bear in mind all the time the needs of the poorest consumers. That was why we allowed two tons of coal absolutely free before coal rationing begins, 100 therms of gas free before gas rationing begins and also the 200 Board of Trade units of electricity free. I take the opportunity of mentioning that this evening because, as the hon. Gentleman said, there is still even to-day some confusion in people's minds.

Mr. G. Griffiths: Do I understand this to be the case: Suppose somebody has used 250 units of electricity, does he then get only 75 per cent. of his 250 units, and does he not get his 200 units free first? Suppose a person is using 50 cwts. of coal instead of 40 cwts.? Are the 50 cwts. to be rationed; but the 40 cwts. not to be rationed?

Mr. Lloyd: Anyone consuming coal is allowed 75 per cent. of what he consumed the year before, and if that 75 per cent. brings out his consumption below two tons of coal he will still get his two tons. The same applies to gas and electricity. The poorest type of consumer in most districts gets his coal in very small lots, by what is called the paper-bag trade. We have gone out of our way to make sure that in


the case of small consumers who get their coal in this way, in small quantities, there is no rationing; there is no limit of two tons. Therefore, we have done our best to see that the poorer consumers are well looked after. We have done this in consultation with the coal merchants and the co-operative societies, and we have decided that the figure of two tons is the right figure. Let me add this, that in cases of hardship or difficulty the local fuel overseer is in the locality in order to adjust difficulties. He has instructions to deal with the matter sympathetically. In the case of illness, or in the case of reception areas where there are more people in the house than usual, or even in cases where consumers have been very economical—for all these reasons they can approach the fuel overseer for a ration in excess of what they are allowed.

Mr. Logan: Has the hon. Member any idea of the number of people in poor neighbourhoods who have been making application for more fuel? I have seen as many as 100 people making application.

Major Milner: Is the hon. Member aware that not fewer than 14 different forms have to be filled up and that they are completely incomprehensible to the people?

Mr. Lloyd: I do not think that that can be the case. It does not apply to the small consumer, and the hon. and gallant Member must consider all the ramifications of the coal trade and that the forms were drawn up in consultation with the trade itself.

Major Milner: Why not in consultation with the consumers?

Mr. Lloyd: May I turn to the broad questions which have been raised this evening. I think hon. Members opposite will agree that my general attitude is not one of obstinacy when they raise matters in connection with the coal trade. I have no intention of being obstinate to-night. I should not defend the Order if I thought it was wrong, or if there were real reasons for making a change. But, equally, hon. Members opposite will agree that it would not be right to make a change in policy if it were really against the national interest to do so just because at first sight a number of people cannot understand the reasons for the policy. First of all I want

to make a few general remarks about the coal trade in relation to the war. Hon. Members opposite, and those engaged in the coal trade, know from the experience of the last war that coal is vital in war, but neither this House nor the country has yet fully realised the extent to which coal will be vital to us in this war. We shall need every ton of coal we can raise in the country. According to the best advice that I can get, even with the maximum production that we can expect, we shall still need to see that there are certain priorities in the use of that coal and that it is reserved to a certain extent for the uses which are most vital to the war effort.
Hon. Members have felt that there is a connection between rationing and the occurrence of idle time and unemployment in the pits. I hope to convince them that they are wrong in thinking that there is a connection. At this moment any coal that can be produced can be sold, and the rationing of coal is not having any effect on unemployment. Hon. Members may find it a little difficult to understand why that is so. My information to-day is that London as a whole is buying every ton of coal it can get, irrespective of the rationing scheme. Even with the fact that people have left, London is still buying every ton of coal it can get. That means that it can get transport to London, which is a very important point.
Hon. Members have given a number of examples of idle time at the pits. I was rather interested to see that a number of those who have spoken come from the North East coast, because actually there is at the present time in the country as a whole very little idle time. The figures for the week ended 30th September show-that the average working time throughout the country was just over 5½ days.
Hon. Members will ask the same question that I asked. How is it that it is just over 5½ days when the normal working week is 5½ days? The answer is that in Scotland they have been working on a slightly different basis, and that has brought the average actually above the normal working week. Such idle time as is occurring is occurring mainly in the export districts, and is due either to the failure of ships to arrive because of delays on passage or to the bunching of ships arriving in convoy. I do not want to give actual figures of the longer time that


these ships' passages are taking, because it will be understood that it may not be altogether wise; but, as hon. Members know, on the North East coast, Durham and Northumberland, it is the delay in the ships leaving the North East coast ports which is causing the hold-up at the pits.
Recently, I have approached the colliery owners and urged them to stock as far as they can. Hon. Members know-that that is not always as easy in some cases as it is in others, but I have urged them to do so. I want to emphasise to the House, however, that the really serious cases of idle time occurring in these days are not due to any general lack of demand for coal, and certainly they are not due to anything in the least connected with rationing; but they are due to the physical difficulty of getting coal away from the ports as a result of the difficulties with shipping which arise at the beginning of war-time conditions.
On the other hand, there is a certain amount of idle time due to inland transport difficulties. I am sure that hon. Members who are familiar with the coal trade will recollect that in normal peacetime conditions the railways are unable to meet the full winter demand for coal in the consuming areas of the country, and that deficiency is met by the accumulation of stocks which are gradually depleted throughout the winter. This brings me back to the point which I made this afternoon. The rationing system at this moment is not restricting production at the pits, but what it does do is to cause the reduction which takes place normally in the stocks in the great consuming areas to take place more slowly than it otherwise would do. I ask hon. Members to bear in mind the fact that we are normally now in a period of declining stocks in the consuming areas; to bear in mind also that it is a normally accepted feature of the coal trade that the transportation system is not sufficient to meet the current demands for winter consumption, and that even where the transportation system is delivering coal at maximum rates during (he winter, still the stocks are going down. I would then ask them to consider whether it is not a wise policy, in the interests of the country at the present time, in view of the risks which we know we are running to-day— although they have not so far occurred

—to allow the stocks in the great consuming centres to fall too fast, when we know-that they could not in any case, even under normal peace-time conditions, be maintained at their level, and to consider what the position would be if there were a serious dislocation of the coal transportation system as a result of enemy action. I suggest to the House that it is a serious short-term problem. I do not know whether hon. Members would really wish to take the responsibility of changing that decision if they were standing at this Box at the present time.

Mr. Batey: Yes, we would.

Mr. Ellis Smith: Is not this a case of building up the stocks?

Mr. Lloyd: Stocks have been built up, but our view is that the wise policy is to conserve those stocks, and not allow them to be dissipated quickly. I ask hon. Members to consider what would be the position if those stocks really had been dissipated, and if we were then faced with a really considerable shortage of coal. Would not hon. Members opposite rise in this House, and in the interests of the public ask why we had been so improvident as to allow stocks to be dissipated in that way so that when the time of difficulty came there was no re -serve to meet the essential needs of the people? [HON. MEMBERS: "Why reduce output?"] I have explained that it is a question of transportation.

Mr. R. J. Taylor: Stocks can be built up at the consuming end and at the producing end. I take it the right hon. Gentleman means the depletion of stocks at the production end?

Mr. Lloyd: No, at the consuming end.

Mr. Taylor: Very well, that strengthens my point. Would he consider it wise that a colliery should be idle when it could be filling stocks at the producing end?

Mr. Lloyd: I said a moment ago that I had asked colliery owners to engage in stocking in proper circumstances. I am in favour of it, but it does not meet the point, which I would emphasise, that you have to consider the conservation of stocks in the consuming districts when you know that there is a definite limitation on transportation, even in peace time.


and in view of the risks which must be borne in mind of further dislocation under war conditions, by enemy action. I have dealt so far only with the question of idle time and I have shown, I hope convincingly, that rationing is having no effect in causing idle time but that idle time is due to shipping delays.
I turn to the general question of existing unemployment in the coal trade, the unemployment which existed before the war. It is a more important problem, because on a larger scale than the problem of idle time. The fact that men have been thrown out of work because of shipping delays is disagreeable and is a thing which we want to get rid of as quickly as possible. I know that the authorities at Sea Transport Department and at the Admiralty are doing all they can to get shipping on the move in the normal way and to deal with that problem, irrespective of any question of rationing. But the bigger problem of unemployment is connected with the longer term policy for the production of coal in war time. Shortly after the outbreak of war, I approached the Mine-workers' Federation of Great Britain and the Mining Association and asked them to meet jointly, as the practical bodies in the industry, to consider how best to increase output up to the anticipated requirement of 260,000,000 to 270,000,000 tons. I do not wish to go into details about any of the larger and rather theoretical estimates which we have heard but I can say that both the Mining Association and the Miners Federation consider that it would be a big task to reach the output figure I have mentioned.
Hon. Members know better than I do that you cannot get a considerable increase of production all at once. New faces have to be opened up and new roads constructed, and it takes time. I am glad to say that the Mining Association and the Miners' Federation jointly have entered wholeheartedly into the consideration of the problem of the increase of production. Among the matters which they have on their programme for consideration are such questions as how far men who have been unemployed can be reabsorbed into the industry, and the question of reopening pits which have been closed in the fairly recent past where there is labour available in near by villages.

Mr. J. Griffiths: Is the hon. Gentleman asking the owners to make; a survey of the pits which have been closed in the recent past, where the labour is available?

Mr. Lloyd: I have not gone so far as to tell the Mining Association and the Mineworkers' Federation how they should do the job, but I know that that is one of the problems which they are considering. It is just the point that the hon. Gentleman has put, that is, pits which have been closed in the comparatively recent past and for which labour is available, and that is an immensely more simple problem than trying to open pits that have been closed for a considerable time.

Mr. G. Griffiths: Does the hon. Gentleman know that there are pits in Yorkshire where only one man is working in the stall, and he is asking for three more men? It makes us chaps annoyed about it.

Mr. Lloyd: I can quite understand feelings of annoyance that must arise in particular cases, but I am trying to give the House a broad picture of the whole situation, from which they will see that this picture does mean a greatly increased output from the mines of this country, that the employers and the unions in the industry are working practically upon the problem at persent, and that it will mean a very considerable employment for men who are unemployed at the present time.
Now I would like to tell the House that some of the unemployed in the industry have already been re-employed and that the process of increasing production has already begun, and I think the House and the country would be interested in the very recent figures. There has been an increase in production in the last four weeks, and I should like to point out that, without any question of rationing, which is not the practical point in this matter, there has been a considerable increase in output. Giving round figures only, the output in the last week before the outbreak of war was 4,564,000 tons; during the week ended 9th September, just at the beginning of the war, it dropped to 4,205,000 tons; thereafter it improved, and the figures for the following three weeks were as follows: For the week ended 16th September, 4,686,000 tons; for the week ended 23rd September, 4,769,000 tons; for the week


ended 30th September, 4,880,000 tons; and I should like to point out to the House that the figure for the last week that I have given is not only an increase over the previous weeks that I have quoted, but it is 300,000 tons more than the corresponding figure at this time last year, so that the House will see that there is a definite upward swing in the production of coal.
I have dealt with the short-term question of why we are having rationing now, but I want to deal with the point whether we shall need rationing at a time when we have got this greatly increased production. We want production on this greatly increased scale because the essential requirements of the country are going to increase on a very large scale too. There will be general industry, there will be the coal required for munitions production, and, last but not least, the export of coal in the largest quantities that we can manage for the purpose of getting in return the vital foodstuffs and the materials for munitions production which are necessary for the carrying on of the war, and, in general, for obtaining the command of foreign purchasing power which is vital to this country if we are to carry on the war at the maximum intensity.
I cannot stand at this Box and honestly tell the House that we could, on the advice that I get from the experts and from the Mining Association and the Mincworkers' Federation, meet all the demands that we ought to meet and still have a surplus over to do what we liked with. That is not the position. The position is that if we are to make a very great effort, of which there is every sign by both the employers and men, then we shall be able to meet our essential requirement's; but I fear that it is certain that we shall have to cut down on the luxury consumption of coal in domestic use. That is the position as we see it, and that is why the rationing scheme was based upon a percentage of consumption; and, while it restricts the domestic consumer on a larger scale who, broadly speaking, in peace-time uses coal pretty freely, and who should not be put to undue hardships in making this economy in the interest of the country, at the same time we have kept the smaller consumer free. I hope I have convinced the House that the case is not quite as it appeared

to some hon. Members at the beginning of the Debate, and I would appeal to them at this time, when it is not easy for the ordinary man in the street to understand the reason for everything that is being done, to help to spread the real reasons behind the policy which the Government are pursuing in the interests of the nation's war efforts.

Mr. Paling: The Minister tells us that he has approached the Mining Association and the Miners' Federation in order to get them to co-operate in increasing production. Did he approach either of those bodies and ask for their advice about rationing; if so what did they say?

Major Milner: Has the Minister anything to say about the effect of these restrictions on gas works and so on, in regard to the production of by-products for munition purposes?

Mr. Lloyd: I cannot enter into detail on that point to-night. The situation is being very closely watched by the Minister of Supply. With regard to the other question, it is not appropriate to consult those bodies on the rationing scheme, but I can assure the hon. Gentleman that neither the Mining Association nor the Miners' Federation have made anything in the nature of the representation in some of the speeches we have heard to-night. They recognise that we are engaged in a great effort to raise the necessary amount of coal.

Question, "That this House do now adjourn," put, and negatived.

10.51 p.m.

Mr. Lawson: In view of the answer of the Minister upon this important question of coal rationing, which we do not consider an answer at all, we think it is possible we may have a Division on this matter to register our protest.

Mr. George Hall: I think it is very necessary that this Debate should be continued in the light of the reply given by the Minister. In the course of his remarks he dealt with the importance of coal. I am sure that all in the House recognise the importance of the coal-mining industry.

Mr. Speaker: As there is nothing before the House we must continue with the Orders of the Day.

CONSCRIPTION OF WEALTH (PREPARATORY PROVISIONS) BILL.

10.52 p.m.

Mr. Mander: I beg to move "That the Bill be now read a Second time."
This Bill was read a First time a number of months ago and I cannot help thinking that it is very appropriate indeed, now that we are involved in war, that the special merits of this Measure should be considered. It really does the very thing the country desires. It applies to wealth the same measures as the Government are applying to the conscription of human beings. It lays down that in time of war, when there is general military conscription, the whole of the wealth of persons who are payers of Surtax over and above the Surtax level shall be placed at the disposal of the State, that is, the Treasury, for the purpose of carrying on the war as it may think fit, and wherever I have talked with people about this Measure I have always found they thought that to be an essentially sound and just way of dealing with the situation, because it would be treating men and money on exactly the same basis. The Measure does not actually impose taxation, because only a Motion by a Minister of the Crown can do that. It makes preparatory provisions. It calls upon the Chancellor of the Exchequer to set up machinery for making a valuation of the property belonging to the persons I have indicated, and provides for the setting up of tribunals to deal with the case of Surtax payers who may have conscientious objection to their wealth being used for war purposes. If they can prove their case then their money is made available for hospitals and charitable objects of that kind. They cannot possibly escape. Having laid the main outlines of the Bill before the House, I ask that it may be allowed to pass the Second Reading, so that we may deal with this Measure in the same rapid manner in which so many other questions have been dealt with at the present time.

10.54 P.m.

Mr. David Grenfell: I beg formally to second the Motion.

10.55 P.m.

Mr. Craven-Ellis: Like most Members in this House, I feel that people with private wealth should pay their contribu-

tion towards this country in these hard times, when men are sacrificing their lives, as they are in France and in other places; and if I could see that the country would benefit by the Measure that the hon. Member is moving I would support it. As I understand the Measure, there is to be a contribution to the Treasury by those who are subject to Surtax. I should like to know in what form that transfer to the Treasury from the individual of part of his wealth is to be made. That has not yet been disclosed. Is it to be in the form of scrip, or of deeds? As I understand the financial machinery of the Treasury, it would be possible for the transfer to be made to the Treasury and at the same time to preserve the soundness and stability of that financial machine.
I cannot conceive that there is any better way of contributing towards the country's requirements at this time than by direct and indirect taxation, because that revenue goes to the Treasury from the national income, as it is made year by year, and without in any way threatening or interfering with the national wealth. The proposer of the Measure appears to pay little regard to the effect on the national wealth of providing for a transfer of a certain percentage. With Income Tax at 7s. 6d. in the £ we can fairly say that that represents a contribution of wealth. We do not know now that"s. 6d. is to be—

Mr. Mander: Mr. Mander rose in his place and claimed to move," That the Question be now put," but Mr. SPEAKER withheld his assent and declined then to put that Question.

Mr. Craven-Ellis: —the limit. It might be as high as 10s. 6d. in the £.The proposer of this Bill has not given the matter fair, proper and reasonable consideration. The proposer, whom we know to be a man of considerable wealth —and I should very much have liked, if there had been time—

Mr. Mander: Mr. Mander rose in his place and claimed to move," That the Question be now put," but Mr. SPEAKER withheld his assent and declined then to put that Question.

Mr. Craven-Ellis: —to know exactly how he proposes that the Bill should be operated. I presume that his wealth, like


other wealth, is represented in stocks and shares. [HON. MEMBERS: "Divide."] At this time he would have very considerable difficulty in realising his stock? and shares in order to enable him to make his contribution, and if he was doing it it—

Mr. Marnier: Mr. Marnier rose in his place and claimed to move," That the Question be now put." But Mr. SPEAKER withheld his assent, and declined then to put that Question.

Mr. Craven-Ellis: —as others were doing it, realising their securities for the purpose of this transfer, there would be a certain amount of deflation—

It being Eleven of the Clock, the Debate stood adjourned.

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Captain Waterhouse.]

Adjourned accordingly at One Minute after Eleven o'Clock.